Immigrant workers, including some who entered the U.S. illegally, would gain access to Social Security benefits under President Bush’s recent immigration reform proposal. The president’s proposal, which effectively amounts to an amnesty program for illegal immigrants who can prove they have jobs in the United States, would allow undocumented workers to apply for temporary worker status for a three-year period, renewable for an unspecified number of years.
Business advocates of the proposal want easy access to migrant workers who do jobs they say American workers don’t want. Critics, including TSCL, believe the costs would have grave consequences for Social Security. Adding an estimated 8 to 14 million immigrants, plus their dependents, would place a sudden drain on the program triggering benefit cuts for those who earned them through legal work, and higher payroll taxes on younger working families. The proposed program would give immigrants, including some in this country illegally, Social Security numbers, and would promise a return of their payroll taxes as an incentive for the temporary workers to return home when the work period ends.
President Bush is also advocating a Social Security totalization agreement with Mexico. Totalization agreements allow citizens of one country to earn credit for Social Security benefits for the time they worked in another country. At retirement, the credits from both countries are “totaled” to calculate benefits, and each nation is responsible for paying part of the benefits.
Various experts predict the plan may lure even more immigrants to enter the U.S. illegally. One major reform of immigration law, signed by President Ronald Reagan, offered amnesty and legal status to illegal immigrants already in the United States, and then sought to discourage future illegal entry by imposing penalties on employers who knowingly hired “illegals.” But immigrants saw the 1986 law as an invitation, not a deterrent, according to Stephen Trejo, a labor economist and immigration expert at the University of Texas. By 1990 the portion of foreign-born adults in the work force, legal and illegal, had risen to 9.3% from 7% in 1980. By 2000, this group represented 12.3% of the nation’s workers.
The potential cost of the proposals is not fully known, but is expected to exceed billions of dollars. In 2003, the Social Security Trustees boosted their assumptions of immigrants, including those who are “other than legal,” based on the 2000 Census counts. Their report attributed the increase to the effect of the Immigration Act of 1990, which significantly increased the number of immigrants in the United States. That demographic change prompted the Congressional Budget Office to increase its estimate of Social Security outlays for 2004 through 2013 by $33 billion. Recently an advisory panel of economists and actuaries said the significant increases in immigration, as well as longer life expectancies, are likely to add another $200 billion to Social Security’s long-term financing problems. These estimates do not include President Bush’s latest proposals.
According to a March 2003 report by the Social Security Inspector General, current Social Security policy allows for the reinstatement of earnings if an immigrant, worker later receives a valid Social Security number and can prove the former earnings while illegal, are his. According to the Inspector General, “if an amnesty and/or totalization agreement occurs, the Social Security Administration potentially may need to reinstate a large volume of wages based on unauthorized work.”
TSCL is vigorously opposing the proposals. Social Security benefits based on earnings, while formerly in this country and working illegally, is money that should be used to pay for Notch Reform, and to provide a fair Cost-of-Living Adjustment (COLA).
In September 2003, TSCL submitted a statement on the proposed Totalization Agreement to the House Judiciary Subcommittee on Immigration, Border Security and Claims Subcommittee. TSCL Board of Trustees Chairman George Smith stated, “ TSCL is concerned that allowing individuals who have worked in this country illegally with invalid Social Security numbers to collect benefits will cause great detriment to the Social Security Trust Fund and will, in effect, place a stamp of endorsement on illegal acts.”
TSCL supports the Social Security Inspector General’s recommendation for legislation that would prohibit the crediting of non-legal earnings and work history for the purposes of benefit entitlement.
Sources: “Bush Outlines New Proposal For Undocumented Workers,” Greg Hitt, The Wall Street Journal, January 8, 2004. “Plan May Lure More to Enter U.S. Illegally, Experts Say,” Louis Uchitelle, The New Times, January 9, 2003. “Social Security Administration Benefits Related to Unauthorized Work,” James G. Huse, Jr., The Social Security Administration, March 18, 2003. The Budget and Economic Outlook: An Update, Congressional Budget Office, August 2003, page 23. 2003 Social Security Trustees Report, March 2003. “Panel Suggests Wider View In Social Security Forecasts,” The Associated Press, October 23, 2003.
April 2004
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