Legislative Update: 3/17/2015
Audit Finds Illegal Aliens Using SSNs of the Deceased
A scathing Inspector General (IG) audit of the Social Security Administration (SSA) found widespread fraudulent uses of Social Security Numbers (SSN) because the agency fails to update death information on the SSNs of likely deceased individuals. Specifically, the IG found that there are 6.5 million active SSNs in the U.S. of persons over 112 years old, despite there being only 42 known individuals of that age worldwide in 2014. (SSA OIG Audit, A-06-14-34030, March 2015 at 1) Accordingly, the IG identified “thousands of instances” of fraudulent SSN use to obtain work authorization and open bank accounts. (Id. at 2)
The fraud stems from the failure of the SSA to update its records. When an individual dies the SSA is supposed to record those deaths in a central database, called the Death Master File (DMF), so the SSN shows up as belonging to a deceased person. The SSA relies on the DMF to verify (or reject) social security claims while financial institutions are given access to the DMF when processing financial and credit applications to prevent and identify fraud. (Id. at 1) Yet, the IG found that “SSA did not establish controls to annotate death information… of numberholders who exceeded maximum reasonable life expectancies and were likely deceased.” (Id.) Indeed, of the 6.5 million outstanding SSNs, the SSA actually knows that 1.8 million belong to deceased individuals but the agency failed to properly record this info. (Id. at 2.) Therefore, the IG concluded, “Federal and private entities that rely solely on the DMF to detect deaths would not know these individuals are deceased,” meaning they could not detect fraudulent use of SSNs. (Id. at 3)
The report found overwhelming evidence that suggests illegal aliens are using these SSNs to fraudulently gain employment. Employers submit to the SSA the name and SSN of their employees so the SSA can annually record the W-2 earnings for the purpose of future social security payments. When the name and SSN is valid, the earnings are posted to the Master Earnings File. (Id. at 5) However, when the name and SSN do not match — which suggests fraudulent use — the SSA is unable to determine whose Social Security records should be credited for the wages earned. The SSA therefore assigns these wages earned to a special repository, called the Earnings Suspense File (ESF). (Id. at 6) The IG found between 2006 and 2011 that SSA transferred to ESF nearly $3.1 billion in reported income from 66,920 of the 6.5 million SSNs. (Id.) The report also noted that “[o]ne SSN appeared on 613 different suspended wage reports, and 194 additional SSNs appeared on at least 50 suspended wage reports that SSA received during this 6-year period.” (Id.) Additionally, criminal investigations into three specific instances confirmed that illegal aliens were using a deceased relative’s name and SSN to work, but government attorneys declined to prosecute all three cases even though the fraudulent use of a SSN is a federal felony. (Id. at 5, fn. 8; see 18 U.S.C. § 1028)
Remarkably, the SSA is resisting the IG’s recommendation to update the 6.5 million SSNs to reflect that they belong to deceased individuals. Even though doing so would end the fraud, the SSA claims this is unnecessary because they are not processing social security payments from these SSNs. (Id. at 5-6, 9) Moreover, they said that correcting the record would require too much work, namely “significant manual analysis and develop[ment of] new automated screening protocols” that would “detract from other mission critical work.” (Id. at B-3)
The IG criticized the SSA’s objection to correcting its files, stating that “the 6.5 million records represent a significant void in the DMF.” (Id. at 9) The IG continued, “Even though these identities are not being used to receive Social Security benefits, they can be used for other improper activities, such as filing for benefits from other Federal agencies or States, opening bank accounts, or applying for jobs.” (Id.)(emphasis added)
The leaders of the Senate Homeland Security and Governmental Affairs Committee blasted the SSA in response to the audit. Chairman Ron Johnson (R-WI) said, “It is incredible that the Social Security Administration in 2015 does not have the technical sophistication to ensure that people they know to be deceased are actually noted as dead.” (Johnson Press Release, Mar. 9, 2015) He continued, “Tens of thousands of these numbers are currently being used to report wages to the Social Security Administration and to the IRS. People are fraudulently, but successfully, applying for jobs and benefits with these numbers.” (Id.) Ranking Member Tom Carper (D-DE) added, “Preventing agency errors by keeping track of who has died is a relatively simple problem that the government should pursue as a high priority.” (Id.)
DOJ Appeals after Judge Demands Explanation for Inconsistent Statements
Last Thursday, the Obama Administration attempted to bypass U.S. District Judge Andrew Hanen’s injunction blocking it from implementing DAPA and expanded DACA by filing a motion for a stay in the Fifth Circuit Court of Appeals. (Bloomberg.com, Mar. 12, 2015; Emergency Motion for Stay, Mar. 12, 2015; see FAIR Legislative Update, Feb. 18, 2015)
The Department of Justice (DOJ) appealed to the 5th Circuit after Judge Hanen refused to accede to the Administration’s demand that it lift (stay) the injunction blocking his executive amnesty programs. On February 23, the DOJ had asked the district court for a stay of the injunction and a ruling by February 25. (Expedited Motion to Stay, Feb. 23, 2015) Last Monday, however, Judge Hanen announced he would not rule on the motion to stay until the federal government clarified inconsistent statements it had made in court regarding the implementation of the executive amnesty programs. In particular, the court asked why the DOJ stated in court that DHS had not begun implementing the November 2014 memorandum when in fact it had already approved 100,000 three year DACA applications based on it. (See FAIR Legislative Update, Mar. 10, 2015; DOJ Defendant’s Advisory, Mar. 3, 2015; Order, Mar. 9, 2015) Judge Hanen set a hearing for the DOJ to “fully explain” on Thursday, March 19. (Id.)
The DOJ responded to Judge Hanen by filing in his court a six page “supplement” to its Fifth Circuit motion which purported both to explain these extended DACA approvals as well as alert the judge that it was taking its case to the appellate court. (Supplement to Motion, Mar. 12, 2015) In its filing to Judge Hanen, the DOJ pointed to the U.S. Citizenship and Immigration Services (USCIS) website and the November DHS memo, which indicates that DACA permits would go from two years to three years starting in November. (Id.) However, the text of the November memo (which itself appears internally inconsistent) does not change the DOJ’s direct statement in court that no approvals of revised DACA would take place until February 18. (See Washington Examiner, Mar. 4, 2015) Nor does it explain why the DOJ did not file its advisory that changes to DACA had already taken place until after it lost its fight against a preliminary injunction blocking the November memorandum on February 16. (See FAIR Legislative Update, Feb. 18, 2015) That preliminary injunction also blocked it from approving further three year DACA permits. (Id.)
In its filing to the Fifth Circuit, the DOJ largely repeated the arguments it presented to Judge Hanen on Feb. 23. (See FAIR Legislative Update, Mar. 3, 2015; Emergency Motion for Stay, Mar. 12, 2015) The DOJ argued that the injunction ought to be stayed altogether because Plaintiff states do not have standing, and that DHS had not improperly issued binding policy under the Administrative Procedures Act (APA). (Id.; see IRLI.org, Feb. 20, 2015 for discussion of the APA) It also argued that the appellate court should, in the alternative, confine the injunction to either Texas alone or the Plaintiff states. (Emergency Motion for Stay, Mar. 12, 2015; see IRLI.org, Mar. 2, 2015 and FAIR Legislative Update, Mar. 3, 2015 for discussion of a partial injunction) It also asked the Court to shorten the 10 day period that the States would normally have to respond to its motion to seven days, which the States opposed, pointing out that the federal government itself waited a week to move for a stay in the district court and a month in the appellate court. (Motion for Expedited Appeal, Mar. 12, 2015; States’ Letter, Mar. 12, 2015)
However, for the appellate court to reach the merits of the DOJ’s argument that, it must first address whether the DOJ was proper to go to the appellate court before Judge Hanen ruled on its motion. According to Rule 8 of the Federal Rules of Appellate Procedure (FRAP), a party must “ordinarily move first in the district court” for “a stay of the judgment or order of a district court pending appeal.” (FRAP 8(a)(1)) Meanwhile, FRAP 8(a)(2) states that in order to be able to file in the appellate court, the DOJ would have to show that 1) moving first in the district court would be impractical, or, 2) the district court denied motion or failed to grant the relief requested. (FRAP 8(a)(2)(A)i,ii)) That means, generally a party needs to actually lose at the district court before it can appeal.
The DOJ apparently is taking the position that Judge Hanen, by telling the parties that he needed more clarity before deciding, had in effect rejected its motion, which would let it proceed to the appellate court. (Emergency Motion for Stay, Mar. 12, 2015, at p.8) (Id.) However, it did not cite any legal authority backing up this position. (Id.) The DOJ did cite the “urgency” the federal government is experiencing in being blocked from granting work permits. (Id.)
Meanwhile, on Friday, the Fifth Circuit Court of Appeals rejected the DOJ’s request for an accelerated timeline. (Politico, Mar. 13, 2015; Order, Mar. 13, 2015) While this rejection may indicate that the Fifth Circuit may not be inclined to defer to the Administration’s desire to speed up the process, the Order did not reveal which judges will hear the motion. (Id.) The case is therefore now proceeding with motions to stay the injunction both in the district court and the circuit court, with extended DACA and DAPA remaining blocked pending the outcomes of these motions. Stay tuned to FAIR for the outcomes of these court proceedings…
Lawmakers Seek to Deny Tax Credits to Amnestied Illegal Aliens
Lawmakers on both sides of the Capitol are trying to prevent illegal alien beneficiaries of President Obama’s executive amnesty from collecting tens of thousands of dollars in tax credits. Under the President’s unconstitutional November amnesty decree, four-to-five million illegal aliens will receive Social Security Numbers, making them eligible for the Earned Income Tax Credit (EITC). Because U.S. tax law allows a person to amend their tax returns from the past three years, the Congressional Research Service, the nonpartisan policy research arm for Congress, determined that illegal aliens will each be eligible for nearly $25,000 in EITC tax credits for tax years 2011-2014 combined. (See FAIR Legislative Update, Mar. 3, 2015)
Now, Members of Congress have introduced legislation to deny amnestied illegal aliens access to the tax credit. In the Senate, Judiciary Chairman Chuck Grassley (R-IA) introduced a bill, with 10 GOP cosponsors, that prohibits amnestied illegal aliens under the November action from collecting the EITC tax credit for years worked illegally. (S. 686) According to the Joint Committee on Taxation, Grassley’s bill will save $2 billion between 2017 and 2020. (See Bloomberg, Mar. 10, 2015; Washington Times, Mar. 11, 2015) “This tax credit is meant to help the working poor get into the workforce,” Grassley said. (Grassley Press Release, Mar. 10, 2015) “It isn’t meant to benefit individuals who aren’t authorized to work in the United States.” (Id.) In the House, Rep. Patrick McHenry’s (R-NC) bill goes further, completely denying amnestied illegal aliens from EITC eligibility. (H.R. 1249) In a statement McHenry said, “By introducing the No Free Rides Act we ensure these illegal immigrants will not receive any more benefits intended to help American families.” (McHenry Press Release, Mar. 4, 2015)
Additionally, true immigration reformer Sen. Jeff Sessions (R-AL) spearheaded an effort to uncover how many amnestied illegal aliens have already received Social Security Numbers. In a letter to Social Security Administration Commissioner Carolyn Colvin, Sessions — along with Sen. Ben Sasse (R-NE) — point out that approximately 900,000 Social Security Numbers (SSN) have been issued to Deferred Action for Childhood Arrivals (DACA) amnesty recipients. (Sessions Letter, Mar. 12, 2015) Citing their “constitutional oversight responsibilities,” the Senators ask for the number of SSNs applied for and issued under both DACA and the November 2014 executive amnesty program. (Id.) They also ask if any amnestied illegal aliens have “applied for and received benefits under either the Social Security Disability Insurance program or the Supplemental Security Income program.” (Id.)
Still, the Internal Revenue Service (IRS) defended the decision to allow amnestied illegal aliens to receive the EITC. In a letter to Chairman Grassley, IRS Commissioner John Koskinen wrote, “Section 32 of the Internal Revenue Code requires an SSN on the return, but a taxpayer claiming the EITC is not required to have an SSN before the close of the year for which the EITC is claimed.” (See Washington Times, Mar. 2, 2015)
Senate Will Vote on Executive Amnesty Supporting AG after Human Trafficking Bill
On Sunday, Senate Majority Leader Mitch McConnell (R-KY) said that he would put off the nomination of Loretta Lynch for Attorney General until after the Senate passes the anti-human trafficking bill which Democrats in the Senate have held up over abortion funding riders. (Politico, Mar. 16, 2015) Last Tuesday, he had indicated his intention to bring the nomination to the Senate floor for a vote sometime this week. (The Hill, Mar. 10, 2015) But then the Majority Leader, who never threatened to hold up nominations over executive amnesty, said on Sunday during “State of the Union” that the nomination would be put off “if we can’t finish” the trafficking bill. (Politico, Mar. 16, 2015)
Numerous Republican senators oppose Lynch’s nomination because of her position on immigration. During her confirmation hearings in the Senate Judiciary Committee, Lynch said that she believes that the President’s executive amnesty policies are constitutional. (See FAIR Legislative Update, Mar. 3, 2015) She even stated that she believes illegal aliens have the “right” to work in the U.S. (Id.) But many Senators found her statements entirely inconsistent with the law, including Senator Ted Cruz (R-TX), who said that any senator who votes to confirm a nominee who affirms in her hearing that she will “ignore” the law is “complicit in the lawlessness.” (Politico, Feb. 24, 2015)
Nevertheless, the Judiciary Committee voted 12 to 8 to send Ms. Lynch’s nomination to the Senate floor, with the unanimous support of Democrats on the committee and the votes of three pro-amnesty Republicans, Sens. Lindsey Graham (R-SC), Orrin Hatch (R-UT), and Jeff Flake (R-AZ). (See FAIR Legislative Update, Mar. 3, 2015) Pro-amnesty senator Susan Collins (R-ME) is also reportedly backing her, but no other Republicans have indicated they will. (Politico, Mar. 12, 2015) If she maintains their support, and receives unanimous support from Democratic senators on the Senate floor, Vice President Joe Biden will be able to cast the tie-breaking vote confirming her.
A number of other Republicans, including Majority Leader Mitch McConnell, have not yet said whether they will vote to confirm her, but many are hesitant to do so because of her support for the President’s executive amnesty. (Politico, Mar. 15, 2015) On Sunday, Sen. McConnell said there was “no question” her nomination was “suffering” because of the executive amnesty. (Id.)
Missouri House Passes Bill to Reserve Scholarships for Legal Residents
On Wednesday, the Missouri House passed House Bill (“H.B.”) 187, which prohibits illegal aliens from receiving post-secondary education benefits in the state, including taxpayer-funded scholarships, grants, and financial assistance. (Washington Times, Mar. 11, 2015) H.B. 187 passed by a vote of 111 to 44. (Id.)
Specifically, H.B. 187 provides that no alien without a lawful immigration status may be eligible to receive taxpayer-funded post-secondary education benefits in Missouri. (H.B. 187) H.B. 187 also requires all Missouri public colleges and universities to charge illegal aliens the same tuition rate as international students and charge illegal aliens at least the same tuition rate as citizens or nationals of the United States who reside out-of-state. (Id.) Federal law already prohibits public colleges and universities from charging illegal aliens less than out-of-state citizens. (8 U.S.C. § 1623)This bill, however, will close loop-holes that allow illegal aliens with deferred action to receive in-state tuition and other state post-secondary education benefits.
Representative Scott Fitzpatrick, sponsor of H.B. 187, defended the bill. According the Representative, providing taxpayer-funded scholarships, grants, and financial aid to illegal aliens will “reduce benefits paid to Missouri citizens.” (Missourian, Mar. 11, 2015) “If they’re allowed to receive these scholarships, it will be at the expense of Missouri citizens,” Representative Fitzpatrick added. (Id.)
Debate in Missouri regarding post-secondary education benefits has grown substantially following President Obama’s expansion of the DACA program, principally because Missouri’s higher education system has been suffering a budget crisis due to the weakened economy. State fiscal support for higher education decreased by 29.7 percent per student between fiscal year 2008 and fiscal year 2013. (Center on Budget and Policy Priorities) During this period, Missouri’s public universities and colleges were forced to increase tuition, reduce scholarship awards, layoff faculty, and freeze wages to make up for this loss. (Id.; Northwest Missourian, Mar. 16, 2015; Standard, Feb. 21, 2012)
The Missouri Senate is next to consider H.B. 187. The bill must be approved by the full Senate and signed by the governor before it can become law.