June 15, 2007 (Washington, DC) – The immigration bill being debated by the Senate would allow over two million illegal workers who received Social Security numbers prior to 2004 to receive more than $966 billion in Social Security benefits by 2040.
Despite a provision in the bill that would prevent individuals who performed illegal work and then obtained a Social Security number after 2007 from receiving credit for Social Security taxes paid in previous years, the legislation does nothing to prevent aliens who illegally obtained "non-work" Social Security numbers prior to 2004 from claiming benefits.
The loophole was revealed Friday by TREA Senior Citizens League, a 1.2 million member nonpartisan seniors advocacy organization based in Alexandria, Virginia.
Between 1974 and 2003, the Social Security Administration issued more than seven million "non-work" Social Security numbers, which entitled some foreign nationals – some of whom were illegal aliens – to services such as Medicaid and food stamps. The majority of non-work Social Security numbers were issued during an era of less restrictive immigration policy; in some cases, aliens didn't need proof of citizenship to receive a number.
Despite their "non-work" status, millions performed unlawful work. Under the Senate legislation currently being considered, this group would be eligible for Social Security benefits.
"The Senate is telling the American people that illegal aliens wouldn't be able to collect Social Security benefits under this immigration deal, and that is flat wrong," said Shannon Benton, executive director of TREA Senior Citizens League. "The truth is that illegal aliens would receive more than double in Social Security benefits what American taxpayers have spent so far on the war in Iraq."
According to the Social Security Administration, the Social Security Trust Fund will begin paying out more than it is taking in by 2017, and will be completely exhausted by 2041.
I've spoken with Brad Phillips, the media contact for this release, and I've found out the following information. This present Senate bill would do nothing to prevent the holders of these "non-work" Social Security numbers from receiving Social Security benefits; it seems that, under the status quo, they are already capable of receiving these benefits. As Mr. Phillips pointed out, Sen. Hutchison (R-TX) proposed amendment SA 1415 (which was adopted), but this amendment only affects those who gain Social Security numbers after January 1, 2004. As the text of the amendment reads (emphasis added):
So how did they get to the $966 billion? It's complicated, but here's the method they used to estimate the numbers of "non-work" Social Security number holders. Starting with the 7 million "non-work" Social Security numbers assigned (quoting Mr. Phillips):
(a) Insured Status.--Section 214 of the Social Security Act (42 U.S.C. 414) is amended by striking subsection (c) and inserting the following new subsections:
``(c)(1) Except as provided in paragraph (2), for purposes of subsections (a) and (b), no quarter of coverage shall be credited for any calendar year beginning on or after January 1, 2004, with respect to an individual who is not a natural-born United States citizen, unless the Commissioner of Social Security determines, on the basis of information provided to the Commissioner in accordance with an agreement entered into under subsection (d) or otherwise, that the individual was authorized to be employed in the United States during such quarter.
``(2) Paragraph (1) shall not apply to an individual who was assigned a social security account number prior to January 1, 2004.
Our policy analyst assumed the following (most of which are sourced and substantiated by specific public information):
- Assumed that 80 percent of non-work Social Security card holders performed illegal work at some point. This is a modest figure, considering it assumes a 20 percent unemployment rate, dramatically higher than the average U.S. unemployment rate from 1974-2003.
- Used the number of 75 percent of illegal workers had payroll taxes withheld, whereas 25 percent of workers worked in a cash economy, based on data from the chief actuary of Social Security
- Used data from Inspector General’s analysis of Social Security non-work file to assume 66% of illegal workers had no change in status (they remained in the country but ineligible to work)
- Adjusted those that remained by mortality (assumed a relatively small mortality of 2% to die to age 62, but then each subsequent year adjusted for subsequent death rate of 2% per year)
And I'm not the only one interested in this story: as a result of this release, TREA Senior Citizens League was invited to testify before the Senate Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International Law this Tuesday at 4pm. The Hearing is entitled “Comprehensive Immigration Reform: Government Perspectives on Immigration Statistics (Continued).” The group’s executive director, Shannon Benton, will be testifying and answering questions in front of the subcommittee. So if you're interested, you might be able to check it out on C-SPAN (if they broadcast that meeting...)! I'll follow up if I get any new information.
UPDATE 6/18: According to a policy analyst at TREA, the average holder of one of these "non-work" Social Security Numbers could earn $312,000 in benefits over a twenty-year retirement.
