Art Cashin Uncovers Another Unintended Consequence Of Immigration Reform
As UBS' Art Cashin points out, the weekend talk shows were filled with talk of immigration reform, and yet, as he exclaims, no discussion of Social Security. The avuncular arbitrageur, however, sees immigration reform from a different and insightful perspective noting that while immigration reform may finally get the undocumented worker a fairer break, Social Security will lose significantly...
Via Art Cashin,
Immigration Reform And Social Security – An Unintended Consequence? – The weekend talk shows were filled with talk of immigration reform. There were long lists of consequences discussed. Yet none that I heard mentioned Social Security.
There are said to be about 11 million undocumented folks around the country who need immigration reform. Most of them are working at any job they can find to make ends meet.
In order to get most of those jobs, they have to supply their employers with a Social Security number. Since they are undocumented, they don't have a Social Security number so many have to submit a false Social Security number.
That, in turn, means a great many have FICA deducted and sent to a Social Security system from which they will never collect. For each, their employers also contribute in their name.
If those perceptions are correct, those folks and their employers have poured millions and millions of "bonus" dollars into Social Security, yet the system remains broken.
The same type of thing occurs when somebody works two or three jobs. If his (or her) earnings go over the FICA limit, the worker can claim a refund of the overdraft on their income tax form. The employers, however, don’t know about the other employers. So, their share of the overpayment lingers as another "bonus" in the system.
Despite the various bonuses, the system is still going broke each day. If immigration reform comes, the undocumented may finally get a fairer break but Social Security will lose those unfair bonuses.