Saturday, September 11, 2010
Are Illegal Immigrants Propping Up the Social Security System?
It's also no secret to anyone who has been paying attention to such issues over the past 30 or more years that Social Security is in trouble due to changing demographics (less people working, more people retired), longer average lifespans, longer retirements, and more generous benefits than previous generations received. To deal with these issues it is very likely that the retirement age will have to be raised in the future and benefits frozen or cut to keep the program solvent.
To make matters even worse, an article this week in the Washington Post of all places reveals that an internal Social Security Administration study has determined in 2007 illegal immigrants contributed somewhere between 5.4% to 10.7% of the trust fund's total assets of $2.24 trillion that year. Many of them are using a Social Security number tied to an invented name or one that belonged to someone else. Of the rest, many got legal cards when they entered the country under a temporary work visa. They stayed illegally after their visas expired.
Can you imagine what condition Social Security would be in without illegal immigrants? As one Social Security official puts it: "If for example we had not had other-than-legal immigrants in the country over the past, then these numbers suggest that we would have entered persistent shortfall of tax revenue to cover [payouts] starting [in] 2009, or six years earlier than estimated under the 2010 Trustees Report."
The irony here, according to the Post and the Feds, is that illegal immigrants tend to pay Social Security taxes but don’t collect benefits, while legal immigrants tend to collect more in Social Security benefits than they pay in taxes. This begs the question, are illegal immigrants necessary to keep the social safety net of the US Government solvent? Is that why the Feds seem to turn a blind eye to illegal immigration?
The other irony is that granting amnesty to illegal immigrants would eliminate these gains to Social Security by allowing them to collect Social Security benefits in exchange for their taxes. A classic Catch-22 situation that has no easy answer.
What do you think? Should we just keep ignoring illegal immigration and collecting their tax dollars to prop up the faltering Social Security system?