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Wednesday, February 16, 2005

Legal immigrants will help

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Legal immigration will be a boost to Social Security during the next 75 years, providing a net benefit of more than $600 billion to the trust fund in that period, a study says.

In addition, increasing legal immigration by 33 percent would help reduce the long-term fiscal problems with Social Security by 10 percent, said Stuart Anderson, executive director of the National Foundation for American Policy, which released the report yesterday.

"Because we have a pay-as-you-go system, additional workers are very beneficial to the Social Security system," Mr. Anderson said. "Increases in legal immigration will make any reforms in the system easier to achieve."

The trust fund faces a $3.7 trillion shortfall during the 75-year actuarial lifetime of the program. President Bush and Congress are debating how to shore up the system without cutting benefits or raising taxes. Mr. Anderson and Rep. Christopher B. Cannon, Utah Republican, said at a press conference yesterday that immigration could be part of the solution.

Mr. Anderson assumed an annual net rate of 600,000 legal immigrants per year, based on numbers from the Social Security system's actuaries.

The effects of illegal immigration, Mr. Cannon said, also are important factors because those immigrants often create false Social Security numbers to obtain jobs and end up paying into the system without ever receiving benefits.

"If we got rid of illegal immigrants tomorrow ... what would happen is we'd lose $30 billion in the trust fund," he said.

The study, funded by the immigrant-advocacy group Merage Foundation for the American Dream, was questioned by several organizations.

John C. Goodman, president of the National Center for Policy Analysis, said the figures were "almost certainly wrong."

"While additional workers would increase payroll tax revenues, more immigrants also means more spending on other public goods like education, infrastructure, etc.," he said. "Moreover, immigrants would become entitled to benefits in their own right. Since they are disproportionately low-wage earners, they would receive more benefits per dollar of tax payments than do typical native workers."

Steven A. Camarota, research director at the Center for Immigration Studies, which favors tighter restrictions on immigration, questioned whether the study took into account the total government finances. He said legal immigrants are more likely to benefit from programs such as the Earned Income Tax Credit, which is designed to repay the payroll taxes collected from low-wage workers.

"The value of what we give out to legal immigrants in the EITC probably comes very close to that," he said. "It's not clear there's any benefit at all."

He also said Mr. Cannon's calculation of how much would be lost by deporting illegal immigrants was flawed because the $30 billion figure assumes all incorrect payments to the system are from illegal aliens. Mr. Camarota said the actual number is about one-fourth that total.

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