Analysis of Trump’s Immigration Policies and Social Security Impact
Steve Moore, co-founder of the Committee to Unleash Prosperity, recently shed light on President Donald Trump’s proposal to sell a $5 million “gold card” for U.S. residency.
A new report raises concerns that the measures taken by the Trump administration to tackle illegal immigration could further jeopardize Social Security finances, potentially hastening its bankruptcy.
A recent study from Social Security Trustees indicates that the primary trust funds are set to be depleted by 2034. If this occurs, beneficiaries may see a reduction of approximately 19% in their benefits unless payroll tax collections can be increased effectively.
The Penn-Wharton Budget Model (PWBM) estimates that unauthorized immigrants contributed around $24 billion to Social Security taxes in 2024.
Further analysis by PWBM considered three deportation scenarios. Each scenario is thought to delay the depletion date of Social Security Trust Funds by roughly six months, depending on various historical baselines and enforcement levels regarding immigrant repayment timelines.
Projected Social Security Trust Fund Depletion
Under the first scenario, a 10% deportation rate for fraudulent immigrants during each of Trump’s terms would lead to a net loss of $73 billion over the next decade and $218 billion over the course of 30 years.
The second scenario involves the government deporting 10% of unauthorized immigrants annually for a decade, which would result in $133 billion lost in the next ten years and $656 billion in 30 years.
In the final scenario, if illegal immigration were halted after ten years of deportation, it would similarly incur losses of $133 billion in the first ten years and a staggering $884 billion over thirty years.
PWBM suggests that to offset these losses, an increase in payroll taxes—approximately $180 a year from the median U.S. household—would be necessary, growing at around 3.5% each year thereafter.
Economic Contribution of Legal Immigration
A separate report indicated the significant role of legal immigration in bolstering the U.S. economy, particularly as the country faces demographic challenges. The report stresses that maintaining a GDP growth target of over 3% in the coming decade is unlikely without a rise in legal immigration levels.
The Unleash Prosperity report highlighted how immigrants contribute to innovation and economic dynamism. Children of immigrants, in particular, tend to earn more than their parents and display higher educational attainment.
Stephen Moore pointed out that immigrants generally serve as net contributors to public finances through payroll taxes, although they do not often directly collect benefits. Their children, however, have contributed to the overall system.
Moreover, from 2013 to 2023, immigration accounted for nearly half of the workforce growth in the U.S., with a significant portion of Fortune 500 companies being founded by immigrants or their children. This brings us to the consideration of who leads these successful firms. Tesla’s CEO, Elon Musk, along with Google’s Sundar Pichai and Nvidia’s Jensen Huang, are notable examples of immigrant success stories.
Moore concluded that implementing a “generous, targeted legal immigration system is crucial for the U.S., especially as the native population ages and challenges persist in maintaining economic growth.” It’s a conversation worth having as we navigate the intricate dynamics of immigration and social welfare.
