As politicians grapple with the best way to deal with the soaring costs of Social Security, they might be interested to find out that pursuing comprehensive immigration reform could do a lot to solve the problem.
Keeping the nation's current immigration system in place would put many undocumented immigrants at risk of being deported. But if the number of immigrants in the U.S. were to decrease, the nation’s labor force would begin to shrink in 2015, putting even more pressure on an already taxed Social Security system, according to a new report from Business Forward. The organization, which many view as an ally of President Barack Obama, includes members like Walmart, McDonald's and Citigroup.
That’s because fewer workers would be contributing to the Social Security Trust Fund at the same time that the number of retirees relying on the fund is growing. More than 80 percent of projected population growth over the next 40 years comes from immigrants and their children, according to the report.
“When you’re thinking about our long term budget problems, getting rid of the immigrants frankly isn’t an option,” Nikhil Joshi, the research director at Business Forward, told The Huffington Post. “We need them to pay the bills.”
Undocumented workers already contribute about $15 billion per year to the Social Security Trust Fund, according to the report. Overall, their contributions account for about 10 percent of the total trust fund. And laws that make undocumented workers nervous about their status in the country decrease the likelihood that they’ll contribute to federal coffers in the future.
“When immigrants are here on a undocumented basis, it’s less likely that they and their children will stay in the country and get jobs and pay taxes,” Joshi said.
The findings come as politicians debate the politics of immigration reform and the best way to address the national debt. Obama unveiled in his budget plan last month a proposal that would cut Social Security spending by tying its cost of living adjustments to a different measure for inflation. The inclusion of the plan, known as chained CPI, has stoked the ire of many of his liberal supporters.
Meanwhile, the so-called Gang of 8 senators tasked with immigration reform drafted a comprehensive reform bill that includes a provision to allow undocumented immigrants to eventually gain citizenship.
Some conservative groups have claimed that immigration reform would actually increase the burden on government social safety net programs because the new laws would make more people eligible to receive benefits. The reality, according to Joshi, is that undocumented immigrants cost the benefit system the most when they first get into the country because their children attend schools.
That means that much of the cost of undocumented immigrants being in the country has already been incurred. And as they stay in America longer and their children get older and get jobs, immigrants will wind up contributing to the nation's coffers, not taking away from them.
“The cost that immigrants have are really immediate,” Joshi said. But as soon as they turn 20, “it more than makes up for the cost that we face when they come here.”
Other recent reports -- including from conservative sources -- have echoed Business Forward’s findings. The American Action Forum, a conservative think tank, released a paper earlier this month that argued immigration reform would reduce the federal deficit by $2.5 trillion, in part by reversing a decline in workforce participation that started 10 years ago, according to the Washington Post.
Conservative groups have also begun distancing themselves from a 2007 study from the right-leaning Heritage Foundation, which claimed that immigration reform would cost the country at least $2.6 trillion in Social Security and Medicare benefits by the time immigrants reach retirement age.
In a blog post earlier this month, the Cato Institute, a libertarian think tank debunked some of the study’s claims, calling it “flawed” because it exaggerated the cost of immigration reform while downplaying newly-legal immigrants’ tax and economic contributions.
Also on HuffPost:
The Template: California Proposition 187 (1994)
California's Proposition 187 was submitted to the voters with the full support of then Republican governor Pete Wilson. It essentially blamed undocumented immigrants for the poor performance of the state economy in the early 1990s. The law called for cutting off benefits to undocumented immigrants: prohibiting their access to health care, public education, and other social services in California. It also required state authorities to report anyone who they suspected was undocumented. <strong>Status:</strong> The law passed with the support of 55 percent of the voters in 1994 but declared unconstitutional 1997. The law was killed in 1999 when a new governor, Democrat Gray Davis, refused to appeal a judicial decision that struck down most of the law. Even though short-lived, the legislation paved the way for harsher immigration laws to come. On the other hand, the strong reaction from the Hispanic community and immigration advocates propelled a drive for naturalization of legal residents and created as many as one million new voters.
The Worst: Arizona SB 1070
The Arizona Act made it a misdemeanor for an undocumented immigrant to be within the state lines of Arizona without legal documents allowing their presence in the U.S. This law has been widely criticized as xenophobic and for encouraging racial profiling. It requires state authorities to inquire about an individual's immigration status during an arrest when there is "reasonable suspicion" that the individual is undocumented. The law would allow police to detain anyone who they believe was in the country illegally. <strong>Status:</strong> The law was signed into law by Arizona Governor Jan Brewer on April 23, 2010. But it has generated a swirl of controversy and questions about its constitutionality. A federal judge issued a ruling that blocked what critics saw as some of the law's harshest provisions. House: 35-31 (4/12/2011)
Following Arizona's Footsteps: Georgia HB 87
The controversy over Arizona's immigration law was followed by heated debate over Georgia's own law. HB 87 required government agencies and private companies to check the immigration status of applicants. This law also limited some government benefits to people who could prove their legal status. <strong>Status:</strong> Although a federal judge temporarily blocked parts of the law considered too extreme, it went into effect on July 1st. 2011. House: 113-56 Senate: 39-17
Verifying Authorized Workers: Pennsylvania HB 1502
This bill, which was approved in 2010, bans contractors and subcontractors employ undocumented workers from having state construction contracts. The bill also protects employees who report construction sites that hire illegal workers. To ensure that contractors hire legal workers, the law requires employers to use the identification verification system E-verify, based on a compilation of legally issued Social Security numbers. <strong>Status:</strong> Approved on June 8th 2010. House: 188-6 (07/08/2010) <a href="http://www.flickr.com/photos/donkeyhotey/" target="_hplink">Flickr photo by DonkeyHotey</a>
A Spin Off of Arizona: Utah HB 497
Many states tried to emulate Arizona's SB 1070 law. However, most state legislatures voted against the proposals. Utah's legislature managed to approve an immigration law based on a different argument. Taking into consideration the criticism of racial profiling in Arizona, Utah required ID cards for "guest workers" and their families. In order to get such a card workers must pay a fee and have clean records. The fees go up to $2,500 for immigrants who entered the country illegally and $1,000 for immigrants who entered the country legally but were not complying with federal immigration law, <a href="http://articles.latimes.com/2011/mar/06/nation/la-na-illegal-immigration-20110306" target="_hplink">according to the LA Times.</a> <strong>Status: </strong> Law went into effect on 03/15/2011 House: 59-15 (03/04/2011) Senate: 22-5 (03/04/2011)
The Most Comprehensive: Florida HB-1C
Florida's immigration law prohibits any restrictions on the enforcement of federal immigration law. It makes it unlawful for undocumented immigrants within the state to apply for work or work as an independent contractor. It forbids employers from hiring immigrants if they are aware of their illegal status and requires work applicants to go through the E-verify system in order to check their Social Security number. <strong>Status: </strong>effective since October 1st, 2010
The Hot Seat: Alabama HB 56
The new immigration law in Alabama is considered the toughest in the land, even harder than Arizona's SB 1070. It prohibits law enforcement officers from releasing an arrested person before his or her immigration status is determined. It does not allow undocumented immigrants to receive any state benefit, and prohibits them from enrolling in public colleges, applying for work or soliciting work in a public space. The law also prohibits landlords from renting property to undocumented immigrants, and employers from hiring them. It requires residents to prove they are citizens before they become eligible to vote. The law asked every school in the state to submit an annual report with the number of presumed undocumented students, but this part, along with others, were suspended by federal courts. <strong>Status:</strong> Approved June 2nd, 2011 House: 73-28 (04/05/2011) Senate: 23-11 (05/05/2011) <a href="http://www.flickr.com/photos/longislandwins/" target="_hplink">Flickr photo by longislandwins</a>