You are using an older browser version. Please use a supported version for the best MSN experience.

Trump's deportation plan could cost taxpayers half a trillion dollars

CNBC logo CNBC 2/24/2017 John W. Schoen

UP NEXT
UP NEXT
As President Donald Trump rolls out more details of a plan that could deport millions of undocumented U.S. immigrants, the true cost of such an undertaking is coming into sharper focus.

In a speech to the Conservative Political Action Conference on Friday, Trump outlined what he called his administration's "swift and strong action to secure the southern border." He said his administration would be "throwing" gang members, drug dealers and criminal aliens out of the country and "will not let them back in."

Until there are more details of the plan, much of which will require congressional approval, estimates are sketchy. But by any full accounting, the fiscal and economic costs would be huge.

Recently the Trump administration has backed off earlier pledges to deport anyone in the country illegally — Homeland Security Secretary John Kelly said Thursday "there will be no mass deportations" after he met with Mexican officials. 

Still, the Trump administration also this week directed government agencies to, among other things, begin rounding up and deporting anyone in the country illegally, whether or not they have committed serious crimes.

(click to expand) (click to expand)

If the U.S. would seek to remove the entire population of the estimated 11 million undocumented workers now in the U.S., it would cost upwards of half trillion dollars, according to one estimate. It could also wipe out a chunk of the American economy roughly the size of the annual gross domestic product of Texas.

The new Trump initiative includes hiring thousands of new immigration agents, building new detention centers and constructing a southern border wall that was a centerpiece of Trump's election campaign.

Breaking down deportation costs

Last March, American Action Forum, a center-right policy institute led by former CBO director Douglas Holtz-Eakin, estimated it would take between $100 billion and $300 billion to arrest and remove "all undocumented immigrants residing in the country, a process that we estimate would take 20 years," the group said.

Once those undocumented immigrants were removed, it would take another $315 billion in higher enforcing costs to stop them from coming back, according to AAF.

That estimate includes just the hard cost of removing undocumented workers; it doesn't take into account the economic impact that would result from the removal of some 11 million people from the labor force and the resulting loss of consumer spending.

AAF estimated the removal of that many people would shrink the pool of U.S. workers by 6.4 percent, which means that 20 years from now, the U.S. economy would be nearly 6 percent smaller.

That works out to a loss of $1.6 trillion in lost wages, spending and other economic activity.

To put that into perspective, the gross domestic product for Texas last year was about $1.5 trillion, second behind California's.

AdChoices
AdChoices
AdChoices

More from CNBC

image beaconimage beaconimage beacon