Build a Wall — Around the Welfare State for Non-US Citizens
Wednesday, President Trump argued that “those seeking immigration into our country must be able to support themselves financially and should not use welfare for a period of at least five years.” That law is already on the books, but Trump’s instincts are correct on this issue. Congress can do a lot more to restrict access to welfare for immigrants, but it should go even further than Trump recommends — by denying access to welfare for all noncitizens.
Immigrants don’t come to the United States for welfare, they come to work. It’s bad enough that taxpayers have to support bloated, ineffective welfare schemes for U.S. citizens. They should not be forced to do so for recent arrivals.
Lower-income immigrants are less likely to use means-tested welfare programs than lower-income native-born Americans. When lower-income immigrants do use those programs, the dollar value of the benefits they consume is far below their native-born counterparts with similar income.
If natives consumed Medicaid at the same rate and dollar value as lower-income immigrants do, the program would be 42 percent smaller. Relatedly, immigrant labor force participation rates tend to be higher than for natives and they are about twice as likely to start a business.
Immigrant welfare use is a small problem relative to the size of the welfare state. In addition to their relatively lower use rates and the small value of the benefits they consume, immigrants pay about $14 billion a year more into Medicare Part A than they consume in benefits, compared to the roughly $31 billion a year deficit that natives impose. Medicare needs serious reform, but immigrants are helping to keep the system solvent in the meantime.
Regardless of the truth, polls show that immigrant use of welfare is a very real concern to many Americans. Immigrants clearly don’t need welfare, but the false perception that they consume it in massive quantities dampens public enthusiasm for liberalizing immigration laws. A Cato Institute policy analysis from a few years back described how Congress could end this perception by simply barring non-citizens’ access to large portions of the welfare state, from food stamps to Medicaid.
Ending non-citizen access to welfare can address these concerns. If false public perceptions of immigrant welfare use led to welfare reform that diminished their access then taxpayers, including those who are immigrants, would benefit at a very low cost. Such a proposal would separate those honestly worried about immigrant welfare use from those who use it as an excuse to oppose immigration.
Trump’s statements in favor of restricting welfare access did not include many details. However, there is no shortage of means to restrict non-citizen access to welfare.
For instance, there are some minor reforms, such as enforcing documentation requirements for Medicaid applicants, and improving the accuracy and frequency of use for the Systematic Alien Verification for Entitlements (SAVE) program that checks whether welfare applicants are actually eligible for benefits. Some reform suggestions go further, such as preventing all non-citizens from receiving cash benefits through the Temporary Aid to Needy Families program and food stamps, as well as reforming the Earned Income Tax Credit and Child Tax Credit so only citizens have access.
Current law already bars immigrants from receiving many welfare benefits, but states have the authority to spend their own tax revenue on aid for immigrants ineligible under federal rules. As much as this rightly rankles many voters, principles of federalism and the Constitution make it difficult for Congress to ban that practice, except when federal funds are involved.
Preventing non-citizens from accessing welfare will save taxpayers money and calm the concerns of many taxpayers. Congress can and should expand upon Trump’s idea to further restrict immigrant welfare use by barring all non-citizens from accessing benefits.
Everyone will win under such a policy, and there will be no doubt that immigrants continue to flock to our shores to achieve the American Dream, rather than receive a welfare check.