On April 4, 2008, the Congressional Budget Office - responding to a request from Rep. John Conyers - estimated the cost of H.R. 4088, the Secure America Through
Verification and Enforcement Act of 2007 or SAVE Act. The bill didn't pass, but it shows that the outlay for eVerify would be about $12 billion over ten years. e-Verify would also result in the federal government losing about $17 billion over ten years from the moral hazard of taxation on money that was earned illegally; while a significant amount, the government shouldn't be in the business of profiting from illegal activity.

See their analysis in this PDF file: link.

They estimate that over 10 years the major costs of the bill would be:

1. $17.3 billion in lost revenues as illegal aliens were "paid outside the tax system" and as employers stopped "withholding income and employment taxes from the wages of undocumented workers and reporting these amounts to the Internal Revenue Service through the use of an Individual Tax Identification Number (ITIN) or other employee identification number would no longer withhold or report such taxes."

2. About $12 billion for the verification components: $3 billion for the Employment Verification System and $8.9 billion for SSN Verification.

3. About $11 billion for the other, non-verification-related components of the SAVE Act: increased detention space, additional personnel, etc.

Regarding the first, it's obviously a horrible situation for a governmental entity to be profiting from illegal activity, since that will tend to cause the entity to support or enable further illegal activity in order to keep the money flowing. Also, forcing companies to employ off-the-books labor will reduce the likelihood that they'll employ such labor since audits performed as a result of various investigations would turn up that use. And, unlike the standard "I didn't know!" response when employers are caught employing on-the-books illegal labor, what they were doing would be very clear, and prosecutable.

Needless to say, the American Civil Liberties Union - a group that's directly collaborating with the Mexican government - crowed about the report in "E-Verify Would Cost $40 Billion, CBO Says/Employer verification boondoggle will rob taxpayers of hard-earned benefits" (aclu.org/immigrants/workplace/34821prs20080408.html). At the link, their senior legislative counsel Tim Sparapani says:

E-Verify is bad policy for both employers and employees, and now we discover it would also be bad for taxpayers and senior citizens, costing more than $40 billion in lost tax and Social Security revenue.

Both the ACLU's title and Sparapani are lying: since the CBO report covered the whole SAVE Act; the $40 billion contains the non-eVerify-related costs described in #3 above. They also make this false statement:

The legislation would result in employers and workers who now pay taxes choosing to go "off the books," decreasing both tax and Social Security receipts by $17 billion and $22 billion [sic] respectively, over ten years.

Actually, the $23 billion (what they call $22 billion) is for the new spending discussed in #2 and #3 above.