This is at a time when former President Donald Trump had endorsed moves to impose limits on federal assistance to illegal immigrants and sparked heated controversy surrounding immigration policy and its socio-economic implications.
Study reveals immigrants use less welfare
The study, conducted by the Cato Institute, utilized data from the Survey of Income and Program Participation (SIPP) and found that, on a per capita basis, immigrants received 27% fewer welfare and entitlement benefits than native-born Americans in 2020. To be more specific, while immigrants accounted for 14.6% of America’s population, they received just 11.1% of all means-tested entitlement and welfare benefits. This would indicate that, as opposed to popular belief, immigrants are less reliant on government welfare programs than native-born Americans.
Welfare use breakdown indicated that immigrants used 36.9% fewer Social Security benefits, 26% less Medicare, 10.7% less Medicaid, 11.5% less Supplemental Nutrition Assistance Program (SNAP) benefits, and 87.6% less Temporary Assistance for Needy Families (TANF) benefits than native-born Americans. The one exception was the Supplemental Security Income (SSI) program, and in it immigrants received 11.4% more benefits than natives, averaging an extra $19 per capital.
Implications for Social Security
The findings have significant implications for the Social Security program.
Immigrants of working ages especially contribute disproportionately to the labor force, and thus to the Social Security trust fund through payroll taxes. Immigration will be the sole driver of population growth in the US by 2040, and 77% of the immigrants entering the nation will be of working age, according to the Bipartisan Policy Center. The demographic shift is essential to financing the rising number of Social Security recipients as the native-born population ages. Additionally, the Social Security Administration’s Chief Actually estimated the immigration reform bill of 2013 would have closed around 8% of the 75-year Social Security deficit. That is yet another signal of the overall promise of comprehensive immigration reform to strengthen Social Security and Medicare program solvency.
Trump’s executive order on Federal benefits
Conversely, the executive order issued by former President Trump aims to terminate all taxpayer-funded benefits for illegal aliens.
The order directs federal agencies to examine the programs that are presently granting benefits to illegal aliens and put such programs in alignment with existing federal law so as to deny federal benefits to them.
Trump grumbled that previous administrations had undermined the purpose of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), alleging that tax money was an illegal alien magnet. It must be noted, though, that illegal aliens are already denied most federal benefits under current federal law, aside from emergency health care and schooling for children, except. The executive order merely appears to reaffirm already existing prohibitions and not expand them.
Immigrants’ Economic contribution controversy
The divergence between the conclusions of the study and the executive order is reflective of the controversy in the economic contribution of immigrants in the US. The rationale provided by advocates of tighter immigration control is that illegal immigrants burden the public purse and overwhelm social services. Contrarily, however, the conclusion of the Cato Institute and other organizations is that immigrants, including illegal immigrants, contribute more taxes than they receive in benefits.
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For instance, the majority of illegal aliens pay into the Social Security trust fund with Individual Taxpayer Identification Numbers (ITINs) or with stolen Social Security numbers and pay about $13 billion in payroll taxes each year without receiving any Social Security benefits. This overpayment funds the Social Security fund’s trust fund solvency.
