“It was learned the household income deferred tax credit applied retroactively for three years. So each illegal alien will get $24,000 in compensation.” [The crowd expresses some surprise at this fact, with one person saying “what?”] “Yep, absolutely. You start looking at the process where the GDP [gross domestic product] of Mexico, the second largest input to that, is our system of Social Security and benefits.”
— Rep. Paul Gosar (R-Ariz.), remarks at a rural issues roundtable, Payson, Ariz., Feb. 9, 2015
Lawmakers often hold town hall meetings in their communities to explain what is happening in Washington. But how reliable is the information that is being given at these events?
We wondered that as we watched a clip of one such meeting, held by Rep. Paul Gosar (R-Ariz.). As you can see, the crowd is quite taken aback by one his assertions — that President Obama proposes to give $24,000 to “each illegal alien.” Then he goes onto to say that the second-largest part of the Mexican gross domestic product consists of benefits from Social Security.
Neither of those statements is remotely true. In one case, there’s an element of truth, but the second statement is really wrong.
First, regarding the $24,000, Gosar is referring to the fact that Obama’s executive action shielding about 4 million immigrants from deportation — currently temporarily suspended because of an adverse judicial ruling — would allow illegal immigrants to receive Social Security numbers. With those numbers, they could file amended tax returns for the last three years claiming the Earned Income Tax Credit. (Gosar called it the “household deferred tax credit,” but he meant the EITC.)
A Treasury Department spokesman confirmed that such retroactive claims would be possible, but likely would be cumbersome and possibly costly. “Filing original returns for prior years would likely be difficult, since filers would have to reconstruct earnings and other records for years when they were not able to work on the books,” the spokesman said. “In addition, in order to claim the EITC, these households would need to report income which may result in them owing taxes.”
Moreover, Gosar claimed that every illegal would get $24,000, when that is the maximum possible. The Treasury spokesman said few would qualify for that amount: “The maximum credit is only available to taxpayers with three or more children and who are within a specific income range — only about 12 percent of EITC recipients report having three or more children, and many of these individuals have incomes that would not qualify for the maximum credit.” (See figure H in this report.)
The Fact Checker obviously takes no position on what foes of immigration are calling “amnesty bonuses.” But it should be noted — as the Associated Press did in an article on the issue — that illegal immigrants have been paying into Social Security already. Stephen Goss, Social Security’s chief actuary, told the AP that over the past decade, illegal immigrants have paid $100 billion in Social Security payroll taxes, even though until now they could not hope to claim any benefits after retirement.
“The congressman was implying that each illegal alien family eligible for the tax credit could receive as much as $24,000 in compensation,” Gosar spokesman Steven Smith said.
But Gosar really went off the rails when he claimed that Social Security and other benefits made up the second-biggest part of Mexico’s gross domestic product. It took days to get an answer, but Smith said that Gosar was talking about remittances and their impact on the Mexican economy.
As Emilly Litella would say, “Never mind.” That’s a big difference. We had not been able to find any evidence that Social Security played much of a role in the Mexican economy, especially since an agreement that would allow Mexicans who have earned benefits to receive them in Mexico has not been ratified by Congress.
Even then, remittances — transfers of money by a foreign worker to an individual in his or her home country — are not the second-biggest contributor to Mexico’s GDP, but just 2 percent. Indeed, in terms of remittances as a share of GDP, Mexico is in the middle of the pack among Latin American countries.
Mexico received $24 billion in remittances in 2014, but according to the World Bank, that places it fourth in terms of total amount. India received $71 billion in remittances, China $64 billion and the Philippines $28 billion. The World Bank pays close attention to these numbers because remittances are considered a good thing for a nation’s economy; countries with high inflows of remittances are permitted to borrow more.
However, Mexico is in first place in terms of remittances from the United States, followed by China, India and the Philippines. (You can follow the flows with this nifty interactive map from Pew Research Center.)
“The point Congressman Gosar was making is that it is overwhelmingly clear that remittances, primarily fueled by income and benefits earned in the United States, are fueling our current immigration crisis in countries like Mexico,” Smith said.
The Pinocchio Test
Lawmakers have an obligation to speak accurately to their constituents.
In the first quote, Gosar would have been on more solid ground if he had been clear that he was talking about the maximum that an illegal immigrant might receive from the EITC — and that few would qualify to receive this amount. Instead, he portrayed it as a cash payment to every illegal worker covered by Obama’s action. Contrary to Smith’s explanation, he did not imply anything else — and in fact, he asserted “yep, absolutely” when an audience member expressed surprise.
In the second statement, Gosar suggested that the Mexican economy was being propped up by Social Security payments, which also is false.
Remittances are a different story, and one can certainly have an opinion on whether that fuels immigration, illegal or otherwise. But that’s not what Gosar said. He said that Social Security and other benefits represent the second-biggest part of the GDP, when instead he supposedly meant to say that remittances are 2 percent of Mexico’s GDP.
The mistake on the $24,000 is worthy of three Pinocchios, but the other statement earns Gosar four.
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