Amnesty Won’t Really Help Social Security

In an effort to make the Gang of Eight’s amnesty bill look like a good idea, the bill’s proponents are citing a paper that concludes Social Security will be better off when we grant 11 million illegal immigrants amnesty.

Not so fast.

Heritage’s Rachel Greszler has identified a couple of glaring problems with the analysis, which was produced by the Social Security Chief Actuary.  It alleges a $4.6 trillion immigration boon for Social Security’s 75-year financial outlook.

As nice as that sounds, the estimate fails to take into account all future costs.  Greszler explains:

This is like acquiring new credit cards and adding the newly available credit as assets but not subtracting the money spent on those cards as future liabilities.

She adds:

[T]he Social Security actuaries fail to account for all of the additional benefits that new immigrants and their offspring will eventually draw from the system.

We do not know for sure where the study’s top-line assumptions – including the estimated number of new immigrants, change in tax revenues, and the change in Social Security beneficiaries – came from.

One thing we do know is that it is based on questionable wage assumptions.  Though the current average wage of undocumented workers is $25,000, this analysis is based on the assumption that undocumented workers would make an average wage of $34,400 in 2015, an extremely high estimate.

The analysis assumes that additional births will have “substantial positive effects.”  But again:

Children who are born to undocumented workers living in the U.S. are treated automatically as U.S. citizens and therefore incorporated into the Social Security system upon obtaining their first jobs. Legalizing their parents would not have any effect on their participation in the Social Security system.

Simply put, immigrants who are given amnesty “would pay little, if anything, more in taxes than they otherwise would” had they not been given amnesty, and “they would be eligible for full Social Security benefits.”

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