It’s one of the stranger whodunnits in Washington right now: The Senate version of the GOP tax cut bill substantially altered a noncontroversial provision adopted by the House that excludes illegal immigrants from benefiting from a program for the working poor.
The original proposal by Rep. Luke Messer (R-Ind.) addressed a loophole that allows illegal immigrants to receive taxpayer funds available to people who earn too little to claim the full value of the child tax credit. Designed as an incentive for people to work, the program lets people get more money back from the federal government than they pay in taxes.
Currently, the Internal Revenue Services pays out the money to people with individual tax identification numbers, which are available to noncitizens regardless of immigration status. The House bill would require a Social Security number, effectively cutting out illegal immigrants.
But the Senate bill would continue to let illegal immigrants claim a portion of this benefit.
No one LifeZette contacted could say who is responsible for the change.
“The whole process in the Senate is really under wraps,” said R.J. Hauman, director of legislative affairs at the Federation for American Immigration Reform, noting that senators wrote the bill behind closed doors. “It almost makes me think something nefarious is going on.”
Messer said he is working to get the provision into the merged bill that representatives from the House and Senate are negotiating in a conference committee.
“I’m working to get it included in the final tax cut plan.”
“We can’t continue to reward people who come to our country illegally, while those who work hard and play by the rules struggle to get ahead,” he said in a statement to LifeZette. “I was encouraged when President [Donald] Trump included our legislation in his budget request to Congress, and I’m working to get it included in the final tax cut plan.”
Messer also wrote a letter on Wednesday to House Speaker Paul Ryan (R-Wis.) and House Ways and Means Committee Chairman Kevin Brady (R-Texas), urging them to act.
“I look forward to working with you to pass tax reform that simplifies the tax code, lowers taxes on middle class families, and eliminates tax incentives that reward people who come here illegally,” he wrote.
A report by the Office of Inspector General for tax administration estimated that child tax credit payments to people with individual tax identification numbers total between $5.9 billion and $7.1 billion. It is impossible to determine how many of those people are illegal immigrants, but the government’s Joint Committee on Taxation projected that making the change sought by Messer would save taxpayers $24.1 billion over 10 years.
It is a relatively small amount of money in the context of a tax cut projected to add $1.4 trillion to the debt over the next decade. But Hauman said it should be an easy choice for lawmakers searching for “pay-fors” in order to cut corporate and individual tax rates more deeply.
Hauman added that it affirms a popular principle that illegal immigrants should not be receiving taxpayer handouts. Congress enshrined that principle in the law in the 1990s. But the IRS has maintained that the prohibition does not apply to the additional child tax credit because Congress created it after the law barring illegal immigrants from welfare programs.
“This is, at its core, a loophole,” Hauman said. “You could argue that it’s fraud as well.”
Indeed, the reason Messer took up the cause in the first place is that a TV news station in his home state aired a series of investigative reports in 2012 detailing how illegal immigrants were receiving money on behalf of children who did not even live in the U.S.
Jessica Vaughan, director of policy studies at the Center for Immigration Studies, said eliminating Messer’s provision may be due to an effort for uniformity in the tax code.
“There are some Republicans, and you have seen this for many years, who on the face of it claim to be neutral on immigration but block things like this because they want the tax code to apply equally to everybody,” she said.
But Vaughan said she suspects that it is a “cover for a sympathetic approach to illegal immigration.”
Still, Hauman said, it is a puzzle. Unlike other aspects of immigration, there is no powerful lobby seeking cash payments from the government to people living illegally in the United States.
“It wasn’t controversial … That’s why it was so baffling,” he said.
PoliZette senior writer Brendan Kirby can be reached at [email protected].