For a while now, news outlets have loudly predicted that the Social Security Disability trust fund is quickly running out of money, and will likely run dry by 2018. However, in a surprising development, the Social Security Administration recently projected that the proposed immigration reform bill might actually save SSD and other Social Security programs.
The projection was made in a recently released analysis by the chief actuary for the agency. The analysis was requested by Sen. Marco Rubio, who was part of the bi-partisan group of senators who drafted the bill. One of the biggest features of the bill is a proposed pathway to citizenship for many of the estimated 11.5 million immigrants who are living and working in the country illegally.
Ultimately, the SSA’s analysis said that the effect of the immigration bill on the Social Security fund balance “will be positive.” By adding these undocumented workers to the tax rolls, the Social Security fund could be boosted by $240 billion over the next 10 years, the analysis projected. Additionally, the analysis said that the new workers would add $64 billion in new tax revenues to Medicare, and the overall economy would be boosted a full percentage point by 2017.
The main reasons the Social Security funds have taken such a hit in recent years is because the baby boomer generation is aging into retirement and people are living longer. In 1960, for example, there were 4.9 workers paying into the Social Security system for every person receiving benefits. Today, there are about 2.8 workers paying into the system for every beneficiary.
The SSA’s analysis predicted that there would be nearly 6.6 million more workers paying into Social Security in 2024 if the immigration bill is made into law. The SSA predicts that an additional 683,000 people would be receiving Social Security benefits that same year. However, this will still mean an additional 10 additional taxpayers for each new beneficiary.
Source: The Boston Globe, “Immigration bill may boost Social Security, study finds,” Erica Werner, May 9, 2013