Welfare Reform and Immigrants

Dec 31, 2000

Authors: Tova Andrea Wang

Publisher(s): The Century Foundation

THE ISSUE

In the welfare reform bill enacted in 1996, new legal immigrants to the United States became ineligible for public benefits for low-income Americans. A few provisions were subsequently eased, but legal immigrants who entered the country after August 1996 can live here for five years or longer and still not receive Medicaid, food stamps, cash assistance for poor families, or assistance for the needy blind, disabled, or aged. At the discretion of states, legal immigrants can become eligible for Medicaid and cash assistance for poor families after living in the country for five years; but they can become eligible for food stamps and assistance for the needy blind, disabled, or aged only after becoming citizens (see appendix).

With welfare reform scheduled for reauthorization in September of 2002, renewed debate is underway over whether excluding legal immigrants from public assistance is appropriate. At the end of 2001, it was estimated that at least 116,000 immigrant families have incomes low enough to qualify for welfare and food stamps, but cannot receive any assistance because of their date of entry to the U.S. This number will continue to increase.1

Because legal immigrants are required to pay taxes – collectively they contribute $50 billion a year more in taxes than they receive in government assistance – questions have been raised about the fairness of the existing policy.2 At the same time, according to the Congressional Budget Office, just restoring SSI and Medicaid to noncitizens who qualify for SSI would cost nearly $25 billion over five years.3

COMPETING ARGUMENTS

The debate over whether immigrants ought to receive public assistance is more a philosophical and ideological argument than one over fiscal policy. At the time welfare reform was enacted, the Congressional Budget Office estimated that if the four major benefits to legal and illegal immigrants were cut (SSI, Medicaid, food stamps, and AFDC), the total savings over five years would amount to $21 billion.4 But the real impetus for the change in policy was the claim that non-citizens have not earned the right to government support and that offering benefits attracts poor immigrants to the United States. Those who believe that legal immigrants should be eligible for assistance argue:

- The obligation of legal immigrants to pay the same taxes owed by citizens ought to make them eligible for the same benefits available to

- Since legal immigrants together contribute far more to the government than a low-income subset of them would receive in subsidies, there’s no financial justification for excluding them from public support.

- The evidence is weak that providing assistance acts as a “magnet” for poor immigrants.

- Allowing participation is part of a broader American philosophy toward immigrants who come to this country seeking a better life. The relatively equal access enjoyed prior to 1996 “was based on the principle that non-citizens come to America to participate in the full range of American social, economic, and political life and that, with modest exceptions, they should be treated like other Americans.”5

Those who oppose government assistance for legal immigrants argue:

- The United States has a long history of restricting public assistance and discouraging immigrants who would be public charges from coming here.

- The immigration policy of the United States should be that aliens within the nation's borders ought not to depend on public resources to meet their needs, but rather rely on their own resources and those of their families, their sponsors, and private organizations

- Legal immigrants had been applying for and receiving public benefits at increasing rates before 1996, raising concerns that those benefits were encouraging a disproportionate share of low-income individuals to come to the United States.

- Illegal immigration could be blamed in part on the availability of benefits to legal immigrants. Immigrants were entering the country illegally with the expectation that they would ultimately obtain public benefits, either legally or illegally.6

Clearly, one of the major disagreements between these two groups centers on the question of whether public benefits motivate immigrants to come to the United States. While there is not yet conclusive evidence as to whether this is the case, there are good indications that it is not. For example, those states with the most generous welfare provisions have had their foreign born growth rate fall while states with the least generous provisions have had their immigrant population increase. “At precisely the point where the states began to create widely varying safety nets for immigrants, (i.e., the late 1990s), immigrants began moving out of those states with the most generous and available social services and into those that are less generous with lesser degrees of availability.”7

Furthermore, while those states that provide the fewest substitute programs are largely in the South and Mid-West, immigrant settlement in those areas has been rising dramatically; according to preliminary data from the 2000 census, “the proportion of the foreign born living in the West and the South rose from 37.7 percent in 1970 to 65.5 percent in 2000.”8 For example, Mississippi provides no state benefits, yet it has the nation’s fastest growing immigrant population, up by 476 percent since 1990.9

Moreover, a recent study shows that post-enactment legal immigrant families were poorer than pre-enactment immigrant families in New York City (40 versus 29 percent) and just as poor in Los Angeles (30 versus 27 percent).10

RESULTS OF THE NEW POLICY ON IMMIGRANTS AND WELFARE

Overall, economic conditions for poorer legal immigrants in America have substantially worsened since passage of the 1996 welfare act. While the states have stepped in to fill the breach in some instances, that assistance has been scattershot and extremely limited. Immigrants surely cannot rely on the state governments to provide what the federal government no longer will.

Moreover, participation rates in all federal assistance programs is down significantly since 1996, even though the foreign born living in this country continue to be disproportionately impoverished. This includes even receipt of food assistance. Moreover, despite persistent poverty, the number of legal immigrants getting direct financial assistance has also dropped dramatically. Finally, due in part to the 1996 act, a majority of legal immigrants have no health insurance, leading to large numbers of people going without basic medical care.

Response of the States

All states decided to continue to provide federally funded Temporary Assistance for Needy Family (“TANF”) benefits for immigrants who had been in the country for five years as of passage of the Act, and all states except Wyoming continued to provide Medicaid benefits for those immigrants.

Beyond that, state effort to pick up the slack varied. Seventeen states provided state-funded food stamps to some portion of legal immigrants, but only nine extended food stamps to all who were denied through the federal program. Only 21 states extended TANF to all immigrants who lost federal benefits. Only eight states provided complete or almost complete benefits to legal immigrants.11

Hunger

Although it might seem that hunger and nutrition might be the one area where Congress might feel a responsibility to all legal residents, food stamps were one of the most drastically limited programs. As a result, an estimated 940,000 of the1.4 million immigrants who were on food stamps in 1997 lost their eligibility.12 One-fifth of this group was children.13

After the initial act was passed, legislators recognized the draconian nature of such provisions. As a result, legislation passed after the welfare reform act restored food stamps to 250,000 immigrants, mostly children, the disabled and the elderly.14 Moreover, as referred to earlier, recent legislation provides food stamps to legal immigrants who have been in the country for five years and to all children of legal immigrants. However, many of the more recent immigrants still do not have access to federal food aid.

Income and Employment

Income levels among immigrants generally are low and poverty rates relatively high. According to the U.S. Census, while the poverty rate in America overall is 11.3 percent, 19.4 percent of noncitizens are poor.15 In 1999, half of all immigrant families with children had incomes below 200 percent of the federal poverty line, as opposed to 35 percent of citizen families.16

Despite the rather desperate situation many immigrants find themselves in, meeting the ambitions of its authors, legal immigrant participation in federal cash assistance programs plummeted after passage of the Act, including among low income families with children. Among families with one or more adults who are legal noncitizens, the participation rate in TANF declined from 4.9 percent to 2 percent between 1994 and 1999, a 60 percent drop.17 Focusing only on legal low income immigrant families with children, use of TANF fell 53 percent between 1994 and 1999.18

Health and Health Care

In addition to being disproportionately poor, many legal immigrants do not have any health insurance, putting proper medical care often out of reach. Welfare reform exacerbated this situation. After passage, the percentage of low-income immigrants who had no health insurance coverage from any source rose by 6 to 7 percent points between 1995 and 2000.19 The number of immigrants receiving Medicaid fell between 7 and 8 percent between 1995 and 2000.20 Among low-income working age adult legal immigrants, Medicaid use declined by 23 percent. The Urban Institute found that this was not because immigrants acquired other forms of insurance, but rather lost health insurance altogether. 31.6 percent of working age adult citizens lacked health insurance in 1999, while 56.3 percent of working age adult legal immigrants were uninsured.21

Moreover, this lack of access to health insurance proved disproportionately damaging to immigrant children. Participation in the Medicaid program by legal immigrant families declined between 1994 and 1999 by 15 percent.22 While 46 percent of low income noncitizen children lacked health insurance in 1999, only 20 percent of children with native-born parents had no health coverage. Children in immigrant families account for nearly one-third of low income children who have no health insurance in this country.23

A recent study found that applications for Medicaid declined among immigrants in part because “immigrants were afraid to apply for Medicaid,” there was a lack of information on eligibility for immigrants, and immigrants were misdirected by welfare offices.24

STRATEGIES FOR IMPROVEMENT

Comprehensive Reform

The first and most obvious possible change in the law would be to once again give legal immigrants the same access to public benefits as citizens have. In other words, eligibility would not be based upon citizenship but rather legal residency. Legal immigrants pay all the same taxes as citizens and serve in the military when there is a draft. They carry most of the responsibilities citizens do and yet are currently denied much of the government assistance they might need.

Moreover, despite arguments to the contrary, there is no evidence immigrants are motivated to come to the United States because of public assistance programs.25

Thus, Congress could eliminate the five year bar on eligibility for Medicaid and TANF and other means tested programs, and restore SSI eligibility for immigrants arriving after the date of passage of the welfare reform law. Bills, such as that sponsored by Representative Benjamin Cardin (D-Md.) (H.R. 3625), make such amends.

Individual Reforms

• Short of comprehensive reform, it has also been recommended that SSI be restored for immigrants who arrived after August 1996 who became or become disabled after entry. There have also been proposals to extend SSI benefits to immigrants who arrived after the act who have lived in the United States for five years or more.



• The ability to speak English is clearly key to moving immigrants off of welfare toward self-sufficiency. A study by the Economic Roundtable found that of participants who left welfare in Los Angeles between 1990 and 1997, those who had poor English proficiency earned 25 percent less in 1997 than those who left welfare and spoke English well.26 A study by MassINC found that employed immigrants in Massachusetts who are fluent in English earn 33 percent more than immigrants who are not.27 The law currently excludes programs that increase proficiency in English from those that meet the requirement for work-related activities. English language programs should be counted as work participation for meeting the federal work requirements.28



• Many have also recommended ways in which the “deeming” rule, which holds a sponsor responsible for an immigrant, might be reformed. For example, there should be some time limit on how long a sponsor’s income should be considered available, perhaps three years. Moreover, deeming rules should not apply to health care programs as long as purchasing health insurance for employees is so expensive in this country. Deeming should also not apply to such services as child care and employment services that are TANF funded.29



• Health insurance might be provided to legal immigrant children and pregnant women who entered the country after August 1996 without amending the welfare reform act. Several bills have been introduced in Congress that would give the states the option of extending Medicaid and State Children’s Health Insurance Program eligibility to immigrant children and pregnant women.30



• Finally, because participation rates are low partly due to the “chilling effect” of welfare reform, more ought to be done to educate immigrants about the welfare rules. Even eligible immigrants when not correctly informed or afraid do not apply for benefits. The administrative processes by which benefits are obtained should be more transparent and accessible. Where necessary, translation services should be available.

RESOURCES

The Urban Institute

www.urban.org

Center on Budget and Policy Priorities

www.cbpp.org

Center for Law and Social Policy

www.clasp.org

Coalition on Human Needs

www.chn.org

National Council of La Raza

www.nclr.org

National Immigration Law Center

www.nilc.org

U.S. Census Bureau: Poverty

www.census.gov/hhes/www/poverty.html

Administration for Children and Families, U.S. Department of Health and Human Services

www.acf.dhhs.gov

President Bush’s Welfare Reform Proposal

www.whitehouse.gov/infocus/welfarereform/

Written by Tova Andrea Wang, Program Officer and Special Counsel at The Century Foundation

APPENDIX

1 National Campaign for Jobs and Income Support, “A Recession Like No Other: New Analysis Finds Safety Net in Tatters as Economic Slump Deepens,” November 14, 2001

2 National Immigration Law Center, “Immigrants, Employment, and Public Benefits,” p.1

3 Michael Fix and Ron Haskins, “Welfare Benefits for Non-Citizens,” The Brookings Institution, February 2002, p.6

4 Ellen Gamerman, “Welfare Reform Proposal Draws Criticism from Immigrant Groups,” States News Service, January 3, 1994

5 Michael Fix and Ron Haskins, “Welfare Benefits for Non-citizens,” The Brookings Institution, February 2002, p. 1. Federal law since the 19th century has been to deny entry to immigrants who are likely to become a “public charge,” and to deport those who did become public charges. There were also “deeming” rules prior to the 1996 law, and in 1993, the period which an immigrant had to wait for Social Security eligibility was extended from three years to five years.

6 Report of the House of Representatives, “Sec. 400. Statements of National Policy Concerning Welfare and Immigration,” Personal Responsibility and Work Opportunity Reconciliation Act of 1996, 104-725, 104th Congress, 2d Session

7 Jeffrey S. Passel and Wendy Zimmerman, “Are Immigrants Leaving California? Settlement Patterns of Immigrants in the Late 1990s,” Urban Institute, April 1, 2001, p. 20

8 U.S. Census Bureau, “Number of Foreign Born Up 57 Percent Since 1990, According to Census 2000,” United States Department of Commerce News, June 4, 2002

9 FAIR, “Immigration Affects the Whole Country,” June 2002, p. 1

10 The Urban Institute and Survey Research Center, University of California at Los Angeles, “How Are Immigrants Faring After Welfare Reform? Preliminary Evidence from Los Angeles and New York City,” US Department of Health and Human Services, March 4, 2002

11 Shawn Fermstad, “Immigrants and Welfare Reauthorization,” Center on Budget and Policy Priorities, Februa

12 Ibid., pp. 1-4

13 Ibid., p. 7

14 General Accounting Office, “Welfare Reform: Many States Continue Some Federal or State Benefits for Immigrants,” GAO/HEHS-98-132, July 1998, p. 3

15 United States Census Bureau, “Poverty in the United States: 2000,” September 2001, p. 6

16 Michael Fix and Jeffrey S. Passel, “The Scope and Impact of Welfare Reform’s Immigrant Provisions,” Urban Institute, January 2002, p. 31ry 4, 2002, p. 5

17 Ibid., p. 15

18 Ibid., p. 16

19 Shawn Fermstad, “Immigrants and Welfare Reauthorization,” Center on Budget and Policy Priorities, February 4, 2002, p. 9

20 Ibid., p. 9

21 Michael Fix and Jeffrey S. Passel, “The Scope and Impact of Welfare Reform’s Immigrant Provisions,” Urban Institute, January 2002, pp. 23-24

22 Ibid., p. 15

23 Leighton Ku and Shannon Blaney, “Health Coverage of Legal Immigrant Children: New Census Data Highlight Importance of Restoring Medicaid and SCHIP Coverage, “ Center on Budget and Policy Priorities, October 10, 2000

24 Leighton Ku and Alyse Freilich, “Caring for Immigrants: Health Care Safety Nets in Los Angeles, New York, Miami and Houston,” Urban Institute, February 2001, pp. 7-8

25 Carnegie Endowment for International Peace, “Research Papers on Migration: Immigrants and Welfare,” Vol. 1, No. 1, 1996

26 Shawn Fermstad, “Immigrants and Welfare Reauthorization,” Center on Budget and Policy Priorities, February 4, 2002, p. 11

27 National Immigration Law Center, “Immigrants and Public Benefits, TANF Reauthorization,” Letter to Wade Horn, Assistant Secretary, Administration for Children and Families, U.S. Department of Health and Human Services, November 30, 2001

28 Cecilia Munoz, Vice President, National Council of La Raza, “Welfare Overhaul Proposals,” Testimony before the Subcommittee on Human Resources of the House Committee of Ways and Means on Welfare Reform Reauthorization Proposals, April 11, 2002

29 Shawn Fermstad, “Immigrants and Welfare Reauthorization,” Center on Budget and Policy Priorities, February 4, 2002, p. 16

30 Leighton Ku and Shannon Blaney, “Health Coverage for Legal Immigrant Children: New Census Data Highlight Importance of Restoring Medicaid and SCHIP Coverage,” Center on Budget and Policy Priorities, October 10, 2000, p. 3