Would the S.744 Amnesty Benefit the Social Security System?

At the request of Sen. Marco Rubio (R-Florida), the Chief Actuary of the Social Security Administration (SSA) issued an impact assessment of the Gang of Eight’s amnesty legislation, S.744. The report, issued May 8, found that “Overall, we anticipate that the net effect of this bill on the long-range OASDI [Old Age Survivor, and Disability Insurance] actuarial balance will be positive.” This will no doubt be touted by the bill’s sponsors as an argument for adopting their bill. However, the positive balance is an illusion based on the assumptions used in the analysis and, especially in the fact that the analysis is not “long-range” at all. It is only projected to 2024. Among the questionable assumptions underlying the SSA’s analysis is that the legislation would reduce illegal immigration and, thereby, result in a large increase in Social Security tax collections from both workers and employers. The estimate also contemplates a large increase in workers paying into the system as a result of new legal immigration measures. That flow of newly arriving immigrants is larger than the flow of formerly illegal workers joining the program, and, therefore, most of the projected increased contributions will come from new legal immigrants. The greatest deception, however, is that the projection does not extend to when those same workers begin receiving payments from SSA. Therefore, it ignores the fact that low wage workers – a large majority of illegal alien workers – withdraw benefits from the system in excess of contributions. Thus, if SSA were to project the impact of the amnesty legislation over a true “long-range” it would have to acknowledge that the impact would be negative.