WASHINGTON – More than $519 billion in wages has been reported to the Social Security Administration but can't be matched with workers,the agency says.
The total is presumed to reflect the large number of illegal immigrants working in the country using fake Social Security cards,Congress' chief budget adviser said last month.
The $519 billion is a cumulative total that remains unmatched since the retirement savings program started in 1937,and represents gross wages – not withholdings deposited into the Social Security Trust Fund.
Although the exact amount is hard to calculate because of fluctuating tax rates,tens of billions of dollars have been pooled into the trust fund by people who are not getting credit for their contribution.
“We know that immigrants work,we know that includes those who are here illegally,and the taxes are held by their employer regardless,” said Douglas Holtz-Eakin,director of the Congressional Budget Office,at a November hearing of the House Committee on Education and the Workforce. “It's logical that illegal immigrants would be in there.”
Payments from unknown workers to the trust fund total approximately 1 percent of contributions in recent years,but any positive effect for those who are getting credit for paying into the trust fund is minimal,according to government and administration officials. Other experts say the contributions are significant.
Holtz-Eakin first talked about illegal immigrants paying into Social Security at last month's hearing to explore the overall influence of immigrants on the U.S. economy.
“What is the incentive then for the government to fix this problem?” asked Rep. Howard McKeon,R-Calif.,after Holtz-Eakin gave the value of payments that can't be matched.
“I think you're in a better position to answer that than I am,sir,” Holtz-Eakin replied to laughter from lawmakers and the audience.
The unmatchable contributions are having a small effect on the long-term health of the trust fund,said Jagadeesh Gokhale,a senior fellow at the Cato Institute,a libertarian think tank,in an e-mail message.
“Unmatchable contributions are helping us overcome only 6 percent of the 75-year shortfall for the fund,” Gokhale said. “It helps a little,but it’s small potatoes.”
The Earnings Suspense File,which tracks all unidentified payments,increased steadily for the last five years,said Mark Hinkle,spokesman for the Social Security Administration. In 1999 there was $38 million reported that had no identity match to the Social Security number,Hinkle said. By 2003,that number climbed to $57.8 million,with 2.1 million different invalid Social Security numbers used.
Part of the problem of trying to interpret immigrants' effects on the suspense file is the complete absence of any details about who the person was behind the unmatched Social Security number,Hinkle said. While a large proportion of faulty numbers may be immigrants,they could just as easily be legal workers who transposed a number on an application or people forgetting to notify the agency of a name change,Hinkle said.
“We don't have any breakdown simply because in a lot of cases we can't tell,” Hinkle said. “All we know at our end is it doesn't match. Until somebody comes forward,we simply don't know.”
Which could take years,he added.
All the agency can do when it receives withheld taxes that don't match a name or valid number is to send a letter to the employer. In some cases,it could take decades for legal workers to get credit for their contributions to the trust fund,but once the mistake is caught they get full credit,Hinkle said.
Illegal immigrants,who oftentimes make up a number for their employment applications or buy fake cards,don't have the same safety net,even if they later became legal residents and could prove they paid into the system.
“It's their money,and their claiming it shouldn't be used against them,” said Sarah Paoletti,a professor at American University's Washington College of Law who teaches a seminar on employment law relating to immigrants. “They see it as the cost of doing business in the United States – they accept it as a given.”
Counter to what some within the Social Security Administration say,Paoletti and another immigration expert from the Pew Hispanic Center said the number of immigrants in the suspense file is likely considerable.
“My guess is most of the money going in there recently from undocumented immigrants is probably between 85 percent to 90 percent,” said Pew Hispanic Center demographer Jeffrey Passell.
Passell,who recently developed a report for the center on illegal immigrant workers,estimated the total number of illegal immigrants currently working in the United States at approximately 6.9 million people. The report was derived from March 2005 U.S. Census data,he said.
The penalty for misuse of a Social Security number or card is a felony,but prosecution is rare,said Jonathan Lasher,a lawyer in Social Security's inspector general's office. The penalty,which includes imprisonment for up to five years and fines,is for straight misuse and not for other crimes like identity theft that carry stiffer penalties,Lasher added.
“More people are being paid with paychecks and paying taxes,” said Paoletti,who has given legal assistance to undocumented workers in Pennsylvania. “I think undocumented workers give a significant portion to the trust fund,and they'll never reclaim it.”