Immigration and Welfare Reform

By Rosemary Jenks on June 1, 1994

Immigration Review no. 18, 1994


Any alien who, in the opinion of the consular officer at the time of application for a visa, or in the opinion of the Attorney General at the time of application for admission or adjustment of status, is likely at any time to become a public charge is excludable. —Immigration and Nationality Act (INA) § 212(a)(4)

Any alien who, within five years after the date of entry, has become a public charge from causes not affirmatively shown to have arisen since entry is deportable. —INA § 241(a)(5)

United States immigration law has provided for the exclusion of aliens likely to become public charges since 1891, and for the deportation of aliens who become public charges since 1903. In 1994, more than a century after the first public charge clause, Congress is wrestling with the question of how to lessen the impact of immigration on the massive U.S. social safety net — a welfare system that could not have been imagined in its current scope in 1891.

According to 1990 census data, 8.6 percent of all immigrant households received public assistance compared to 7.5 percent of all native-born households. The average annual amount of public assistance received was almost 37 percent higher for immigrant households ($5,373) than for native-born households ($3,927). While the share of native-born households drawing public assistance fell by 2.6 percent between 1979 and 1989, the share of immigrant households receiving public assistance grew by 10.3 percent. The average amount of public assistance received by the native born grew by 60 percent in the 1980s, while the average amount received by immigrants grew by 97 percent. Compounding the fiscal impact is the fact that during the same period, the immigrant population was growing at four times the rate of the population at large.

The Cost of Welfare for Immigrants

Numerous efforts have been made in recent years to estimate the cost of providing public assistance to immigrants. The Urban Institute in May reported that, based on analysis of 1990 census data, immigrants received $3.9 billion in public assistance in 1989. The actual amount of assistance received by immigrants, however, is much higher, since census data only include Aid for Families with Dependent Children (AFDC), Supplemental Security Income (SSI), and state-funded general assistance programs. Food stamps, Medicaid, housing assistance and other nutritional programs are not taken into consideration.

The most comprehensive estimate of the cost of providing public assistance to immigrants comes from a 1993 study by Rice University economics professor Donald Huddle. This study, The Costs of Immigration, estimates the 1992 cost of public services for all immigrants, legal and illegal, at $14.6 billion. This figure includes AFDC, SSI, Medicaid, food stamps, the school lunch program, housing and home energy assistance, nutritional programs and general assistance. It does not include Huddle's estimate of non-public assistance costs such as education, unemployment compensation, job training or criminal justice expenditures.

The public charge provisions of U.S. immigration law clearly are not having their intended effect. Because all levels of government — federal, state and local — are struggling to balance limited revenue with exploding public assistance costs, Congress finally has begun to recognize the need for extensive welfare reform. Each of the four major reform proposals that has surfaced in Congress would curtail the eligibility of immigrants for public assistance.

Another battle over welfare costs is brewing at the state level, as illustrated both by the lawsuits filed by Florida, California and Arizona against the federal government for reimbursement for services provided to illegal aliens, and by a California ballot initiative that would bar illegals from receiving public assistance. Because of the scope of this article, neither the current financial burden on major immigrant-receiving states, nor the potential impact of federal welfare reform on state budgets is addressed here.

Immigrant Eligibility

Under current law, legal immigrants, with the exception of some amnestied aliens and family-sponsored immigrants, receive the various welfare programs on the same basis as U.S. citizens. Intending immigrants must overcome the public charge provision when they apply for a visa. Employment-based immigrants generally provide an employment contract. Family-based immigrants can overcome the provision in a variety of ways. One is to have their U.S.-based sponsor sign an affidavit of support in which the sponsor agrees to provide for the immigrant in case of need. For the first three years of residence, the income and assets of the sponsor will be "deemed" to be available to the immigrant if he or she applies for AFDC, food stamps or general assistance (except in Michigan and Rhode Island, which have overturned the "deeming" provision).

Congress last fall voted to temporarily extend the deeming period for SSI applicants from three to five years to pay for a three-month extension of unemployment benefits. SSI was specifically targeted because it provides more federal money to immigrants than other assistance programs. The number of foreign-born SSI recipients increased by 370 percent — or from 127,900 to 601,430 — between 1982 and 1992, according to the Social Security Administration which runs the program. Total SSI enrollment, on the other hand, increased by only 38.5 percent during the same period. The deeming extension is expected to produce savings of about $320 million over five years, despite the limited effect of the old deeming period — almost 14 percent of the legal immigrants receiving SSI as of June 1991 applied within their first three years of residence, though some of these undoubtedly are refugees.

The amnesty program of the 1986 Immigration Reform and Control Act (IRCA) specified that most amnestied aliens would be disqualified from AFDC, food stamps and Medicaid (except emergency and pregnancy-related care) for five years. This five-year period lapsed in 1993, how-ever, so those aliens are now eligible.

Illegal aliens are currently barred from receiving AFDC, SSI, non-emergency Medicaid, food stamps and housing assistance, though any U.S.-born children are fully eligible. However, illegals may gain access to these benefits by fraudulently claiming U.S. citizenship or because the administering agency fails to verify the residence status of applicants. The Department of Housing and Urban Development (HUD), for example, was mandated by IRCA to verify that all applicants for housing assistance are legal residents, but HUD has failed to approve regulations to implement this mandate. Illegal aliens, therefore, have access to housing assistance. Because illegal aliens are not specifically barred from receiving other public assistance programs, they are, by default, eligible for the nutritional program for Women, Infants and Children (WIC), the school lunch program and certain state and local and food stamps. After five years, a sponsor's income would continue to be deemed to be available to the immigrant only if that sponsor had an annual income above the national median income.

House Republicans last fall proposed their own welfare reform legislation, H.R. 3500. This bill, introduced by Representative Robert Michel (R-IL), would "simply end welfare for most non-citizens." It would make non-citizens ineligible for any federal benefits, including AFDC, SSI, food stamps, non-emergency Medicaid and over 50 other programs. Exceptions would be made for (A) refugees, who would be ineligible for welfare after six years of residence unless they became citizens, and (B) non-citizens over 75 years of age who have lived in the United States for at least five years. Non-citizens receiving public assistance at the time of enactment could continue receiving it for one year and then they would become ineligible.

The Congressional Budget Office (CBO) released in early May a cost analysis of the immigration provisions of H.R. 3500. The CBO estimated that the House Republicans' restrictions on immigrant eligibility would reduce federal outlays by $21.7 billion over five years. Most of the savings would come from reductions in SSI expenditures ($9.2 billion), followed by Medicaid ($7.6 billion), food stamps ($3.2 billion) and AFDC ($1 billion).

The CBO, which examined administrative data, including the SSI Ten-Percent Sample File and the AFDC and Food Stamp Quality Control databases, found that non-citizens account for 11 percent of SSI recipients, five percent of food stamp recipients, and five percent of AFDC recipients. Despite claims from some immigrant advocacy organizations that refugees are the major non-citizen welfare users, the CBO analysis found that most non-citizens receiving welfare benefits entered as legal permanent residents. Those who entered as refugees were the next largest non-citizen welfare population.

A group of more than 90 moderate and conservative House Democrats — the Mainstream Forum — has developed a welfare reform plan that would affect non-citizens in much the same way as the Republican proposal. The Forum's bill, H.R. 4414, would set virtually the same non-citizen eligibility rules as H.R. 3500, except that refugees and asylees would become ineligible for benefits after five years of residence.

The Democrats' proposal has some additional immigration provisions that are not included in the Republican plan, however. H.R. 4414 would make $16 billion available to states to defer costs that may result from the cuts in federal assistance to immigrants. The Forum proposal would also put into statute that affidavits of support obligate immigrants' sponsors to reimburse federal agencies that provide assistance to the sponsored immigrants. Finally, H.R. 4414 would bar illegal aliens from receiving Earned Income Tax Credits (EITC). Currently, according to the Forum, more than $260 million in EITC benefits is going to illegal aliens each year. (See SCOPE, No. 16, Fall 1993, p. 6 for more information on EITC.)

The last major welfare reform proposal, called the "Real Welfare Reform Act" (RWRA) has been introduced both in the House and the Senate. The House version, H.R. 4473, is cosponsored by Representatives James Talent (R-MO), Tim Hutchinson (R-AR) and Charles Canady (R-FL). The Senate version, S. 2134, is cosponsored by Senators Lauch Faircloth (R-NC), Charles Grassley (R-IA) and Hank Brown (R-CO).

Both versions of the RWRA would end eligibility of non-citizens for all federal "means-tested" welfare programs (or those for which eligibility is determined according to the resources, or means, of the applicant). Only emergency medical care and all refugee assistance programs would be exempt from restrictions. Unlike any of the other welfare reform proposals, however, H.R. 4473 and S. 2134 also include a "Statement of Principle" that says "it is not the intention of the Congress to require any state or local government to provide public education services to any illegal immigrant." The bills would require all state and local education authorities to immediately notify the Immigration and Naturalization Service (INS) when an illegal immigrant child enrolls in a public school. The INS would be required to take immediate action to deport the child and any illegal immigrant relatives with whom the child resides. Since the requirements only involve notifying INS, rather than an outright ban on public education for illegal aliens, the proposal may avoid a direct challenge of the Supreme Court decision in Plyler v. Doe, which granted public education to all children, regardless of residence status.

While the restrictions on welfare eligibility for non-citizens would seem to be consistent with the public charge clauses in current immigration law, the Hispanic Caucus has promised to oppose any plan that cuts immigrants' welfare eligibility to finance overall welfare reform. The Caucus nearly succeeded last fall in preventing the lengthening of the deeming period for SSI. Supporters of the measure prevailed largely by presenting it as a choice between benefits for American workers or benefits for immigrants. Debate over welfare reform may come down to the same choice: Should a finite amount of welfare resources be spread so thinly among needy citizens and immigrants that many remain trapped in the cycle of poverty, or should existing resources be concentrated on helping citizens develop the skills and ability to work their way off the welfare rolls?

Topics: Welfare