During a recent hearing before the House Ways and Means Subcommittee on Social Security, Dr. Phillip Swagel, the director of the Congressional Budget Office (CBO), delivered a noteworthy projection. Swagel estimated that the surge in immigration expected between 2021 and 2026 could potentially generate around $1 trillion in additional revenue over the course of a decade. This assertion was made in the context of examining the present and projected financial standing of the Social Security Trust Fund, which faces the looming prospect of benefit cuts of up to 21 percent for individual beneficiaries by the year 2035.
As Congress gears up for the appropriations process, discussions revolving around Social Security funding are set to take center stage once more. While there continues to be a partisan divide between Democrats and Republicans regarding the most viable solutions to address the financial strains facing the program—ranging from tax hikes on the affluent to benefit reductions—a third alternative emerged during the hearing: immigration.
In recent months, Republicans, including former President Donald Trump, have increasingly emphasized the narrative that immigration places undue strain on social safety nets like Social Security and Medicare. However, during the hearing, top budgetary experts challenged this notion, arguing that immigrants could, in fact, have a beneficial impact on Social Security.
Rep. Linda Sánchez (D-Calif.) was among the lawmakers who steered the conversation towards immigration reform during the hearing. She posited the notion that expanding legal pathways to immigration could potentially fortify the Social Security Trust Fund. This proposition garnered agreement from witnesses like Stephen Goss, the Chief Actuary of the Social Security Administration (SSA), who emphasized the potential significance of broadening immigration avenues for the fund’s sustainability.
Goss, in his testimony, attributed part of Social Security’s growing shortfalls to declining birth rates, which translate to fewer workers available to support the large Baby Boomer generation currently receiving benefits. Swagel reinforced this stance by reiterating the CBO’s projection that immigrants could contribute a substantial $1 trillion in tax revenue over the span of a decade, underscoring the positive role immigration could play in bolstering Social Security.
Despite undocumented immigrants being ineligible to receive Social Security benefits, they nonetheless contribute to the program through payroll taxes. Goss highlighted that in 2013 alone, undocumented immigrants contributed nearly $13 billion in Social Security taxes, despite being unable to access benefits.
This perspective stands in contrast to the GOP’s messaging, with Trump previously attributing the decline in Social Security funds to undocumented immigrants. Nevertheless, Goss assured that the SSA takes into account the impact of immigration in its reports, emphasizing its positive contribution amidst declining birth rates.
As the House navigates through the appropriations process, with the looming backdrop of the upcoming election season, Social Security and immigration are poised to remain pivotal topics of discussion among both lawmakers and constituents.