Can Immigration Reform Save Social Security?

Washington Matters

Can Immigration Reform Save Social Security?

If the basic problem with Social Security's future is that too few younger people will be paying in when many baby boomers are drawing benefits out, bringing illegal immigrants out of the shadows and making them part of the system would seem to be a big help. At least that's what some immigrant groups are suggesting.

Obviously if illegal immigrants are going to live and work in the U.S. and take advantage of what this country has to offer, they ought to pay taxes, including the payroll taxes that support Social Security and Medicare. The fact is that many already do because they're working under fake Social Security numbers and taxes are withdrawn automatically (and of course they get no Social Security in return).  But a lot of illegals work in the underground job market, and studies show if they were brought in the open, it would significantly help finance the safety net.

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It's also worth noting that all immigrants pay sales tax on everything they buy and some pay real estate taxes. This helps offset the cost of education and other programs they use, though probably not entirely (no one really knows). But this tax revenue is always conveniently denied or ignored by those who rail against illegals.

Opponents also argue, alternately, that illegals steal jobs from Americans or that they come here to live off the dole and crimes. Employers argue in response that immigrants do neither -- that they help keep the economy going by taking jobs that Americans won't take. A report in Friday's New York Times confirms that most Mexicans cross the border to find jobs -- and the lack of jobs in the recession has led to a huge drop in emigration. That will undoubtedly change when the U.S. economy picks up.


This is why the new enforcement priorities of the Obama administration make a lot of sense. Instead of raiding workplaces and rounding up illegals, as the Bush administration was fond of doing, the Homeland Security Department is going after employers who knowingly hire illegals, often conspiring in paperwork scams. They will still detain illegals that participate in the scams, but policymakers rightly recognize that the key to real change is to make employers obey the law. And it goes hand in hand with Obama's new efforts to beef up border security, including continuing work on the virtual fence

That still leaves the big question of what to do about the 12 million or so illegals already in the U.S., and that's where an overhaul of immigration law comes in. Obama has promised to push for a bill, but it remains a very sticky political issue that many in Congress want to steer clear of. Passions run high, especially on the question of whether to create some way for illegals to become legal after paying a fine and going to the back of the line. 

There are good arguments to be made on either side of the issue, but those who oppose legalization of any kind have to come up with a better alternative than deportation or greater harassment. Deportations are simply not practical and harassment is a pretty awful and ineffective way to get them to leave on their own.

The bottom line is that if illegals are going to stay here and continue to work, it's hard to argue that shouldn't be encouraged to come out of the shadows and pay their fair share of taxes. But they won't do that without the hope of legalization down the line.