Social Security: Why the Deficit and Who Doesn’t Pay but Receives Benefits

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One reason for the DOGE audits and the Trump administration’s efforts to end birthright citizenship is to cut waste and remove illegal aliens and fraudulent recipients from Social Security and other government benefits.The Democrats have pushed hard against immigration enforcement, and among their many claims for why illegals should be allowed to remain in the country is that they do not receive government benefits. This is categorically false. See my several articles on the subject in The Gateway Pundit.When DOGE sought to audit Social Security to cut waste and remove people who were fraudulently receiving benefits, liberals took to the streets in “Hands Off Social Security” protests. Democrat lawmakers and the mainstream media propagated the myth that there was no waste, that no one was receiving benefits illegally, and that this was a Republican plot to throw widows and disabled people into the streets.The reality is that, whether you want to call it waste or not, Social Security money is being spent for purposes other than funding the retirement benefits of the workers who paid into the system, and illegals receive state and federal benefits, including Social Security, through several mechanisms.Since 1935, Social Security surplus revenue has, by law, been invested in special-issue Treasury securities. The cash from those purchases flows into the general fund and becomes available to finance other government spending. In 1950, Social Security collected $2.928 billion, paid $1.022 billion in benefits, and lent the remaining $1.905 billion to the general fund in exchange for IOUs. In early 1968, President Lyndon Johnson began including Social Security and all other trust funds in a single unified budget, making Social Security appear on-budget alongside general spending.In exchange for the borrowed cash, the Treasury credits the trust funds with bonds bearing interest, which in 2025 alone earned $69 billion at an effective rate of 2.6 percent. The Old-Age and Survivors Insurance and Disability Insurance trust funds are legally separate accounts, tracked individually by the Social Security Administration, but reported together because both draw from the same 12.4 percent payroll tax and are managed under the same statutory investment rules.Combined, they held $2.56 trillion in Treasury securities at the end of 2025, representing 88 years of accumulated payroll tax surpluses and credited interest, held in a form the government is legally obligated to redeem in full, on demand, dollar for dollar, whenever benefit payments exceed current income. That figure is down from a 2021 peak of $2.91 trillion.Reserves have declined since 2021 because total benefit payments have exceeded total income every year since, forcing SSA to redeem bonds to cover the gap. The main driver is demographic: the ratio of workers paying in to beneficiaries drawing out fell from over 5-to-1 in 1960 to roughly 2.7-to-1 today, as the last of the baby boom generation reaches retirement age by 2029, while annual cost-of-living adjustments continue raising the dollar amount owed to existing beneficiaries. Reserves are projected to reach zero in 2034, after which incoming tax revenue would cover 83 percent of scheduled benefits.It is this growing gap of uncovered benefits that reinforces the case for DOGE audits and the need to remove nonpayers and fraudulent recipients from Social Security benefits.The original 1935 Social Security Act paid benefits only to workers who had contributed. The 1939 Amendments, signed by Franklin Roosevelt, added benefits for a retired worker’s spouse and minor children, as well as survivors’ benefits for the family of a worker who died prematurely. This marked the first time trust fund dollars flowed to people who had never paid FICA taxes themselves.In March 1966, Lyndon Johnson signed the Tax Adjustment Act, creating Special Age 72 benefits for people aged 72 or older who had never qualified through work. These benefits were funded entirely by general revenue rather than by the trust funds.In 1972, Richard Nixon signed the law creating Supplemental Security Income, which provides benefits to aged, blind, and disabled people with low incomes regardless of work history. SSI’s approximately $61 billion in annual benefits are paid from general revenue. However, its administrative costs, about $1.6 to $1.7 billion per year, are temporarily advanced from the Social Security trust funds and later reimbursed with interest.On the subject of illegal aliens receiving benefits, federal law prohibits payments to noncitizens who are not lawfully present. Section 202(y) of the Social Security Act requires lawful presence and suspends benefits for anyone who does not meet that requirement. Despite these restrictions, illegal aliens access Social Security and SSI funds through several documented channels.Under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, U.S. citizen children in mixed-status households remain eligible for SNAP, Medicaid, CHIP, and WIC regardless of a parent’s status. The fact that illegal alien families collect federal and state benefits through their anchor babies is one of the reasons the Trump administration is working to end birthright citizenship.Separately, SSA’s Office of Inspector General has an active caseload of individuals who used stolen or borrowed Social Security numbers to file for and receive benefits outright. Some high-profile examples include a Dominican national who was unlawfully present in the United States and used a stolen identity to obtain more than $105,000 in Title II disability benefits between 2021 and 2025.A Colombian national without lawful status lived under a stolen identity for over two decades, taking more than $400,000 in federal benefits, sentenced in May 2026. Another individual impersonated a U.S. citizen to obtain SSA disability payments beginning in June 2011 and continued collecting for over $150,000 until arrest in November 2025.In a separate Boston case, an unauthorized immigrant used a deceased American’s Social Security number for 18 years to work, obtain a U.S. passport, and apply for Social Security, unemployment, and Section 8 housing benefits, remaining undetected until the real SSN holder’s family discovered the identity theft after his death in 2012.SSA’s own fraud-allegation data for fiscal year 2024 shows false personation and SSN misuse accounted for roughly half of all 332,927 reported allegations, with SSI specifically making up 9.9 percent of that total. Because SSI eligibility requires only citizenship or qualified-alien status, age or disability, and income under a threshold, a stolen identity satisfies the first gate, and the remaining two are ordinary eligibility questions.The 2004 Social Security Protection Act requires that an alien whose Social Security number was assigned on or after January 1, 2004, have had work authorization at some point to gain insured status. Numbers assigned before that date carry no such requirement, meaning earnings recorded under a pre-2004 number can generate benefit eligibility, including for citizen dependents, without the worker ever having held legal status.In April 2025, President Trump signed a memorandum directing federal agencies to prevent illegal aliens from obtaining Social Security Act benefits, citing more than 2 million Social Security numbers assigned to noncitizens in fiscal year 2024. SSA confirmed in August 2025 that it had updated the records of about 275,000 individuals no longer holding legal status, ensuring people ineligible to receive benefits are not improperly paid.The Department of Homeland Security has since subpoenaed Los Angeles County records to determine whether ineligible illegal aliens received SSI. That investigation remains open, and its findings have not been made public.The post Social Security: Why the Deficit and Who Doesn’t Pay but Receives Benefits appeared first on The Gateway Pundit.