Uncredited contributions to Social Security grew by nearly $300 billion from 2000 to 2004, a giant increase attributable mostly to illegal aliens using erroneous Social Security numbers, and one seniors group said this will become a major liability if those aliens are legalized.
“Our government would willingly bankrupt the system even sooner by giving billions of dollars to people who broke the laws of the United States,” said Shannon Benton, executive director of the Senior Citizens League, which is releasing a report today based on the Social Security Administration’s numbers.
Democrats and President Bush have promised to try this year to pass an immigration bill that includes legal status for the estimated 12 million to 20 million illegal aliens now in the country. Under current law, illegal aliens are not entitled to benefits for illegal work, but the bill says if they gain legal status in the future they can go back and get credit for the work done while illegal.
In 2004, “uncredited earnings” — Social Security tax payments that can’t be matched to valid Social Security numbers — totaled $65 billion — about 10 percent of the program’s total income. The amount of uncredited earnings stood at $301.8 billion in 1999, but had grown to $585 billion by 2004, according to the Senior Citizens League report.
Government officials say they don’t know how many illegal aliens are paying into the system, but say illegal aliens are probably the “chief cause” of uncredited earnings.
The threat to Social Security’s future funding comes because the system is based on current workers paying for current retirees’ benefits. That means illegal aliens help spread the burden, without having access to the rewards in the future.
But if illegal aliens were to gain legal status, they could go back and claim credit for earlier Social Security payments, adding yet another drain on a fund that is already expected to become financially strained within 15 years as baby boomers start to retire.
The issue came up last year during the Senate’s debate on a broad immigration bill. Then, senators voted 50-49 to make sure illegal aliens could collect their benefits after they are given legal status.
“We should not steal their funds or empty their Social Security accounts,” said Sen. Patrick J. Leahy, Vermont Democrat, during the debate. “That is not fair. It does not reward their hard work or their financial contributions. It violates the trust that underlies the Social Security Trust Fund.”
But Sen. Jim DeMint, who fought to cut off benefits, said it amounted to rewarding illegal aliens.
“Why in the world would we endorse this criminal activity with federal benefits?” the South Carolina Republican said.
It turned into a campaign issue, with many Republicans running ads against Democrats who voted to preserve the benefits, or who expressed support for the broader Senate bill.
Mark Krikorian, executive director of the Center for Immigration Studies, said the size of the increase suggests that illegal aliens are doing far more work than is commonly believed. He said to have a surge this size means that in addition to there being many more illegal aliens, those aliens are “getting jobs on the books” — jobs that deliver regular paychecks, where employers file forms and pay taxes on the workers.
“We as a society are telling illegals it’s OK to be here, and so more of them are working aboveboard,” Mr. Krikorian said.
But he said it also shows an opening, if the government wanted to crack down.
“The IRS — they know who every illegal alien is, who’s filed a tax return, and hundreds of thousands of them do,” he said.
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