President Donald Trump’s drive to deport immigrants and block new arrivals could chip away at Social Security’s finances at a time when the program is already on shaky financial footing, experts say. In addition to Immigration and Customs Enforcement’s push for more removals, the Trump administration is also trying to convince certain immigrants to “self-deport.” The efforts include entering more than 6,000 immigrants’ names into the Social Security Administration’s database used to track dead people, which effectively cuts them off from being able to work, access financial services and receive public benefits. The move targets those who may have entered under programs that have ended, such as the Biden administration’s temporary work initiatives. These actions, however, could cut off a funding stream for Social Security. “Immigrants overall actually help bolster the finances of Social Security,” said Jack Smalligan, a senior policy fellow at the Urban Institute and co-author of a proposal to address Social Security’s trust fund shortfall in part by increasing employment and family-based visas. “Immigrants are very important right now, especially as we see a very low birth rate among Americans. Immigrants tend to be younger and contribute to Social Security throughout their lifetime.” Legal immigrants and many undocumented workers without employment authorization pay Social Security taxes, analyses show. Some undocumented immigrants use fake Social Security numbers or ones they may have had before their work permits lapsed. In 2022, for example, undocumented immigrants paid nearly $100 billion in federal, state and local income taxes, including nearly $26 billion in Social Security taxes and $6.4 billion in Medicare taxes, according to the Institute on Taxation and Economic Policy, a left-leaning think tank. (The report takes into account both employer and employee contributions to Social Security and Medicare taxes.) But they are not eligible to receive Social Security benefits if they are not lawfully in the US. “The federal government is essentially receiving free money from these undocumented immigrants,” said Marco Guzman, senior analyst at the institute. “They are contributing to a system they will not benefit from. Who is benefiting? It’s American citizens.” The Trump administration has claimed, without evidence, that many undocumented immigrants are illegally collecting benefits and has said it will put an end to that fraud. Experts, however, say Social Security fraud is relatively rare. Legal immigrants, including recent migrants who obtain work authorization, also help fund the Social Security system. For instance, the surge of immigrants in recent years is expected to boost Social Security’s revenues by $348 billion between 2024 and 2034, according to a Congressional Budget Office analysis released last year. Over the same period, these folks will collect only about $1 billion, the CBO projected. (The analysis estimated the surge would take place between 2021 and 2026, though border crossings to the US dropped in the last year of Biden’s term and are expected to remain low during Trump’s term. It also noted that the immigrants will be younger and therefore less likely to qualify for programs that serve the elderly, such as Social Security, during the coming decade.) Social Security’s actuaries have also examined the impact of immigration on the program’s trust funds, which are projected to be exhausted by 2035, at which time it will only be able to pay 83% of benefits owed to retirees, survivors and people with disabilities. The agency assumes annual net immigration of 1.2 million people, on average. If that figure increases by about 400,000, it would reduce the program’s 75-year shortfall by about 11%, according to Kiran Rachamallu, a research assistant at the left-leaning Center on Budget and Policy Priorities, who analyzed the trustees’ 2024 report. Conversely, reducing net immigration by around 400,000 people would increase the shortfall by nearly 11.5%. “They are actually helping all of us by increasing the solvency of the trust fund,” he said of immigrants. However, the overall impact of the payroll taxes paid by undocumented immigrants or by a potential increase in immigration is relatively small, said Andrew Biggs, a senior fellow at the right-leaning American Enterprise Institute and former deputy commissioner at the Social Security Administration in the George W. Bush administration. It pales in comparison to the amount of benefits paid, he noted. Americans received a total of more than $1.5 trillion in Social Security and Supplemental Security Income payments during the last fiscal year, according to agency data. And increasing or decreasing annual net immigration by about 400,000 won’t change the trust funds’ insolvency date, the trustees’ report found. “At the end of the day, the numbers aren’t big enough to matter,” he said. “There is no imaginable level of increased immigration is going to make a really big dent in Social Security’s funding gap.”
Undocumented immigrants contribute more to Social Security than they receive in benefits
TruthLens AI Suggested Headline:
"Impact of Immigration Policies on Social Security Finances Examined by Experts"
CNN
7.9
TruthLens AI Summary
Experts warn that the Trump administration's aggressive immigration policies, which include deportations and discouraging newcomers, could have negative repercussions on the already fragile finances of the Social Security program. By entering the names of over 6,000 immigrants into a database that tracks deceased individuals, the administration effectively strips these individuals of their ability to work and access benefits. This tactic primarily targets immigrants who may have entered the U.S. under temporary work programs that have since been terminated. While the administration claims its actions are aimed at preventing fraudulent benefit collection by undocumented immigrants, experts argue that the reality is quite different. They emphasize that immigrants, including many undocumented workers, significantly contribute to Social Security through taxes, while remaining ineligible to receive benefits themselves. In 2022, undocumented immigrants contributed nearly $26 billion in Social Security taxes, highlighting their role as a crucial funding source for the program amidst a declining birth rate among the native population.
Furthermore, analyses indicate that the influx of immigrants over the next decade could bolster Social Security revenues by approximately $348 billion, while the projected benefit payouts to these individuals would be minimal, around $1 billion. This disparity underscores the argument that immigrants are essentially subsidizing the system without reaping its benefits. Critics of the administration's stance point out that while increasing or decreasing immigration levels may have some impact on Social Security's financial health, the overall effect is minimal compared to the vast sums disbursed in benefits. The Social Security Administration's actuaries have noted that even a significant increase in immigration would only slightly reduce the program's long-term shortfall. In summary, while the administration's policies may be aimed at controlling immigration, they could inadvertently undermine the financial stability of Social Security, which relies heavily on the contributions of both legal and undocumented immigrants.
TruthLens AI Analysis
The article sheds light on the financial contributions of undocumented immigrants to the Social Security system, countering prevalent narratives that depict them primarily as burdens on public resources. By presenting data on tax contributions while highlighting the potential negative impacts of immigration enforcement on Social Security, the piece serves to inform readers about the broader implications of current immigration policies.
Financial Contributions of Undocumented Immigrants
The article emphasizes that undocumented immigrants contribute significantly to Social Security, paying nearly $26 billion in taxes, despite being ineligible for benefits. This statistic challenges the stereotype that undocumented immigrants do not contribute to the economy. The mention of specific figures, such as the total taxes paid, lends credibility to the argument that undocumented immigrants are essential for maintaining the financial health of Social Security.
Political Context and Implications
The piece also touches on the political climate during Trump's presidency, particularly the administration's focus on deportation. The framing suggests that aggressive immigration policies could inadvertently harm Social Security's financial viability. By highlighting the connection between immigrant contributions and Social Security funding, the article may be trying to influence public opinion about the need for more lenient immigration policies.
Public Perception and Potential Manipulation
The article seeks to shift perceptions regarding undocumented immigrants, portraying them as valuable contributors rather than liabilities. While it presents factual information, it could also be interpreted as a push against anti-immigration sentiment. The language employed is carefully chosen to evoke empathy and a sense of economic responsibility, which could lead some readers to view immigration policies more favorably.
Broader Economic and Social Impact
If the narrative presented in the article gains traction, it could lead to greater support for immigration reform. This may influence political agendas, particularly among groups concerned about Social Security's financial future. The focus on the economic contributions of immigrants may resonate with both liberal and moderate audiences who prioritize fiscal responsibility.
Target Audience and Community Support
The article appears to target a well-informed audience that may have concerns about immigration and its impact on social services. It likely seeks to engage those who are undecided or skeptical about the benefits of immigration, encouraging them to reconsider their stance based on economic data.
Market Reactions and Economic Implications
The discussion surrounding immigration and Social Security could have ripple effects in various sectors, particularly those reliant on a stable workforce. Companies in industries such as agriculture, construction, and services, which often employ undocumented workers, may feel the impact of policy changes. This could influence stock prices in those sectors, depending on the perceived stability of the labor market.
Geopolitical Relevance
Though primarily focused on domestic policy, the implications of immigration debates can extend into global economic discussions, particularly regarding labor markets and demographic shifts. As countries grapple with low birth rates, the role of immigrants in sustaining economies becomes increasingly relevant.
The article presents a nuanced view of undocumented immigrants' contributions to Social Security, challenging dominant narratives that classify them as solely a burden. It emphasizes the need for informed dialogue around immigration policies and their economic implications, suggesting a potential shift in public perception and policy discussions.