CNN
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President Donald Trump’s drive to deport immigrants and block new arrivals could chip away at Social Security’s finances at a time when the program is already on shaky financial footing, experts say.
In addition to Immigration and Customs Enforcement’s push for more removals, the Trump administration is also trying to convince certain immigrants to “self-deport.” The efforts include entering more than 6,000 immigrants’ names into the Social Security Administration’s database used to track dead people, which effectively cuts them off from being able to work, access financial services and receive public benefits. The move targets those who may have entered under programs that have ended, such as the Biden administration’s temporary work initiatives.
These actions, however, could cut off a funding stream for Social Security.
“Immigrants overall actually help bolster the finances of Social Security,” said Jack Smalligan, a senior policy fellow at the Urban Institute and co-author of a proposal to address Social Security’s trust fund shortfall in part by increasing employment and family-based visas. “Immigrants are very important right now, especially as we see a very low birth rate among Americans. Immigrants tend to be younger and contribute to Social Security throughout their lifetime.”
Legal immigrants and many undocumented workers without employment authorization pay Social Security taxes, analyses show. Some undocumented immigrants use fake Social Security numbers or ones they may have had before their work permits lapsed.
In 2022, for example, undocumented immigrants paid nearly $100 billion in federal, state and local income taxes, including nearly $26 billion in Social Security taxes and $6.4 billion in Medicare taxes, according to the Institute on Taxation and Economic Policy, a left-leaning think tank. (The report takes into account both employer and employee contributions to Social Security and Medicare taxes.)
But they are not eligible to receive Social Security benefits if they are not lawfully in the US.
“The federal government is essentially receiving free money from these undocumented immigrants,” said Marco Guzman, senior analyst at the institute. “They are contributing to a system they will not benefit from. Who is benefiting? It’s American citizens.”
The Trump administration has claimed, without evidence, that many undocumented immigrants are illegally collecting benefits and has said it will put an end to that fraud. Experts, however, say Social Security fraud is relatively rare.
Legal immigrants, including recent migrants who obtain work authorization, also help fund the Social Security system.
For instance, the surge of immigrants in recent years is expected to boost Social Security’s revenues by $348 billion between 2024 and 2034, according to a Congressional Budget Office analysis released last year. Over the same period, these folks will collect only about $1 billion, the CBO projected.
(The analysis estimated the surge would take place between 2021 and 2026, though border crossings to the US dropped in the last year of Biden’s term and are expected to remain low during Trump’s term. It also noted that the immigrants will be younger and therefore less likely to qualify for programs that serve the elderly, such as Social Security, during the coming decade.)
Social Security’s actuaries have also examined the impact of immigration on the program’s trust funds, which are projected to be exhausted by 2035, at which time it will only be able to pay 83% of benefits owed to retirees, survivors and people with disabilities.
The agency assumes annual net immigration of 1.2 million people, on average. If that figure increases by about 400,000, it would reduce the program’s 75-year shortfall by about 11%, according to Kiran Rachamallu, a research assistant at the left-leaning Center on Budget and Policy Priorities, who analyzed the trustees’ 2024 report. Conversely, reducing net immigration by around 400,000 people would increase the shortfall by nearly 11.5%.
“They are actually helping all of us by increasing the solvency of the trust fund,” he said of immigrants.
However, the overall impact of the payroll taxes paid by undocumented immigrants or by a potential increase in immigration is relatively small, said Andrew Biggs, a senior fellow at the right-leaning American Enterprise Institute and former deputy commissioner at the Social Security Administration in the George W. Bush administration.
It pales in comparison to the amount of benefits paid, he noted. Americans received a total of more than $1.5 trillion in Social Security and Supplemental Security Income payments during the last fiscal year, according to agency data. And increasing or decreasing annual net immigration by about 400,000 won’t change the trust funds’ insolvency date, the trustees’ report found.
“At the end of the day, the numbers aren’t big enough to matter,” he said. “There is no imaginable level of increased immigration is going to make a really big dent in Social Security’s funding gap.”
