Welfare Reform: Implications of Proposals on Legal Immigrants' Benefits
(Letter Report, 02/02/95, GAO/HEHS-95-58).

GAO found that the percentage of immigrants receiving public
assistance--specifically Supplemental Security Income (SSI) or Aid to
Families With Dependent Children (AFDC)--is higher than the percentage
of citizens receiving these benefits.  Six percent of all immigrants
receive benefits compared with 3.4 percent of all citizens.  Most
immigrant recipients live in four states: California, New York, Florida,
and Texas; more than one-half of all immigrant recipients live in
California.  Between 1983 and 1993, the number of immigrants receiving
SSI more than quadrupled, increasing from 151,000 to 683,000.  During
this period, immigrants grew from about four percent of all SSI
recipients to more than 11 percent.  As a percentage of all adult AFDC
recipients, immigrants grew from about five percent to eight percent.
In all, immigrants received an estimated $3.3 billion in SSI benefits
and $1.2 billion in AFDC benefits in 1993.  Most immigrant recipients
are lawful permanent residents or refugees, but other characteristics of
immigrants receiving SSI and AFDC vary.  For example, the number of
immigrants receiving SSI aged benefits--available to those 65 years and
older--has increased dramatically.  According to the Congressional
Budget Office, a welfare reform proposal now before Congress (H.R. 4)
would save $9.2 billion from the SSI program and $1 billion from the
AFDC program over four years.  GAO estimates that 522,000 SSI recipients
and 492,000 AFDC recipients would become ineligible for benefits under
H.R. 4.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-95-58
     TITLE:  Welfare Reform: Implications of Proposals on Legal 
             Immigrants' Benefits
      DATE:  02/02/95
   SUBJECT:  Disadvantaged persons
             Immigrants
             Welfare recipients
             Income maintenance programs
             Aid to families with dependent children
             Public assistance programs
             Resident aliens
             Proposed legislation
             Cost control
             Eligibility criteria
IDENTIFIER:  Supplemental Security Income Program
             AFDC
             Food Stamp Program
             Medicaid Program
             Responsibility and Empowerment Support Program Providing 
             Employment Act of 1994
             Personal Responsibility Act of 1995
             California
             Florida
             New York
             Texas
             
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Cover
================================================================ COVER


Report to the Ranking Minority Member, Subcommittee on Human
Resources, Committee on Ways and Means, House of Representatives

February 1995

WELFARE REFORM - IMPLICATIONS OF
PROPOSALS ON LEGAL IMMIGRANTS'
BENEFITS

GAO/HEHS-95-58

Legal Immigrants' Benefits


Abbreviations
=============================================================== ABBREV

  AFDC - Aid to Families With Dependent Children
  CBO - Congressional Budget Office
  CPS - Current Population Survey
  CRS - Congressional Research Service
  HHS - Department of Health and Human Services
  INS - Immigration and Naturalization Service
  PRUCOL - permanently residing under color of law
  SSA - Social Security Administration
  SSI - Supplemental Security Income

Letter
=============================================================== LETTER


B-257790

February 2, 1995

The Honorable Harold E.  Ford
Ranking Minority Member
Subcommittee on Human Resources
Committee on Ways and Means
House of Representatives

Dear Mr.  Ford: 

During the past year, several bills were introduced in the Congress
to reform the nation's welfare system.  Most of these reforms call
for providing increased education, training, and supportive services
to welfare recipients.  To finance the increased costs of these
reforms, some proposals, such as H.R.  4--currently before the 104th
Congress--would restrict public assistance benefits to certain groups
of legal immigrants.  Such proposals may have stemmed from concerns
raised about the sheer number of legal immigrants receiving benefits,
about 1.4 million in 1993.  Other proposals, such as the
administration's proposal, would require certain categories of
immigrants to wait longer before receiving public assistance.  These
proposals stem from concerns raised about the number of immigrants
that end up receiving public assistance, even though they were
admitted into the country with a promise of financial support from a
sponsor.\1

These proposals would affect several public assistance programs and
you specifically asked us to focus on two key programs:  Supplemental
Security Income (SSI) and Aid to Families with Dependent Children
(AFDC).\2 The SSI program provides cash benefits to poor aged,
disabled, and blind individuals.  SSI is federally funded, with some
states providing a supplement.  In 1993, federal and state
expenditures for the almost 6 million SSI recipients were nearly $24
billion.  The AFDC program provides cash benefits to poor families
with children who lack support from one or both of In 1993, about
14.1 million recipients received over $22 billion in federal and
state AFDC payments.  A recipient cannot receive both SSI and AFDC
benefits.\3

This report examines (1) how legal immigrants' utilization of SSI and
AFDC compares with that of citizens, (2) the trends in the numbers of
legal immigrants receiving SSI or AFDC benefits, (3) the
characteristics of immigrant recipients relevant to determining
eligibility under the welfare reform proposals, and (4) the possible
impacts of the proposals to restrict immigrants' SSI and AFDC
benefits on federal welfare programs.  We also discuss possible
impacts of the proposals on state general assistance programs and
immigrants' actions in response to these proposals.  (See pp. 
14-15.)


--------------------
\1 As a condition of admittance to the United States, some immigrants
are required to have a financial sponsor willing to provide financial
support for 3 years. 

\2 Under some proposals, legal immigrants would also lose eligibility
for a wide range of assistance, including food stamps, Medicaid, the
Earned Income Tax Credit, and low-income housing. 

\3 While no recipient may receive both SSI and AFDC benefits,
families receiving AFDC may have one or more family members who
receive SSI.  For purposes of determining the amount of AFDC benefits
the family may receive, an SSI recipient is not considered a part of
the family.  See the glossary for program definitions. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Our work shows that the percentage of immigrants who receive SSI or
AFDC is higher than the percentage of citizens receiving these
benefits--6 percent of all immigrants receive benefits compared with
3.4 percent of all citizens.  Most immigrant recipients live in four
states:  California, New York, Florida, and Texas; over one-half of
all immigrant recipients live in California.  Between 1983 and 1993,
the number of immigrants receiving SSI more than quadrupled,
increasing from about 151,000 to about 683,000.  During this time
period, immigrants grew from about 4 percent of all SSI recipients to
over 11 percent.  The growth was greatest in the aged program.  As a
percentage of all adult AFDC recipients, immigrants grew from about 5
percent to 8 percent.  In all, immigrants received an estimated $3.3
billion in SSI benefits and $1.2 billion in AFDC benefits in 1993. 

Most immigrant recipients are lawful permanent residents or refugees,
but other characteristics of immigrants receiving SSI and AFDC vary. 
The two programs serve different populations.  The number of
immigrants receiving SSI aged benefits--available to those 65 years
old and older--has increased dramatically.  Within the aged program,
a growing number of immigrant recipients are 75 years old and older. 
Most AFDC families with immigrant recipients also contain citizen
recipients.  Almost a third of immigrants receiving AFDC are
refugees.  However, data limitations provide an incomplete picture of
immigrant SSI and AFDC recipients.  For example, computerized
information is not available on the number of immigrants with
financial sponsors or the sponsors' income. 

According to Congressional Budget Office (CBO) estimates, H.R.  4
would save $9.2 billion from the SSI program and $1 billion from the
AFDC program over 4 years.  Of immigrants receiving benefits in 1993,
we estimate that over 522,000 SSI recipients and over 492,000 AFDC
recipients would fall into categories where they would lose
eligibility under this proposal--all immigrants would lose
eligibility except lawful permanent residents 75 years old or older
who have been in the United States at least 5 years and refugees who
have been in the United States fewer than 6 years.  The
administration's proposal would affect fewer immigrant recipients by
extending the length of time a sponsor's income is deemed available
for the immigrant and tightening eligibility standards.  CBO
estimates that the two welfare reform proposals could save between
$3.3 billion and $21.7 billion over 4 years from a variety of
programs. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Many categories of legal immigrants are currently eligible for SSI
and AFDC benefits.  SSI provides benefits to three groups of needy
individuals:  aged (65 years old and older), blind, and disabled. 
AFDC provides benefits to needy families with children.  Immigrants
eligible for assistance include those classified by the Immigration
and Naturalization Service (INS) as lawful permanent residents.  Also
eligible for benefits are certain other legally admitted immigrants,
classified by public assistance programs as permanently residing in
the United States under color of law (PRUCOL).\4 Under the SSI and
AFDC programs, the PRUCOL category includes immigrants, such as
refugees, asylees and certain others whose deportation INS does not
plan to enforce.  (See glossary.) However, a few small categories of
immigrants considered as PRUCOL are not uniform between the two
programs. 

Some legal immigrants are admitted into the country under the
financial sponsorship of a U.S.  resident.  The Immigration and
Nationality Act of 1952, as amended, provides for the exclusion of
any alien who is likely to become a public charge.  Aliens can show
prospective self-sufficiency through (1) proof of sufficient personal
resources, (2) an offer of a job with adequate compensation, (3)
posting of a public charge bond, or (4) an affidavit of support
submitted on their behalf by a sponsor who preferably is a U.S. 
citizen or permanent resident.  By signing the affidavit of support,
sponsors attest to their ability and willingness to provide financial
assistance to the immigrant.  However, several courts have ruled that
these affidavits of support are not legally binding. 

Concerned about the number of sponsored immigrants receiving public
assistance, the Congress amended program statutes to include a
sponsor-to-alien deeming period; that is, if a sponsored immigrant
applies for public assistance before a certain time period, a portion
of the sponsor's income and resources are deemed or assumed to be
available for the immigrant's use (whether or not they are available
in fact).  This deeming provision is used to determine eligibility as
well as benefit amount.  For the AFDC program, this period is 3 years
after admission to the United States as a permanent resident.  In
1993, the deeming period for the SSI program was temporarily extended
from 3 to 5 years, starting in January 1994 through September 1996. 
The deeming provisions do not apply if an immigrant becomes blind or
disabled after admission to the United States as a permanent
resident.  Affidavits of support were amended so sponsors currently
agree to provide financial support to the immigrant for 3 years. 

The Responsibility and Empowerment Support Program Providing
Employment, Child Care and Training Act of 1994, reintroduced as H.R. 
4, the Personal Responsibility Act of 1995, introduced by a group of
Republicans during the 104th Congress as part of their "Contract With
America," would eliminate most legal immigrants' eligibility for SSI
and AFDC, as well as food stamps, Medicaid, foster care and adoption
assistance, education programs and numerous other public assistance
programs.  Two groups would remain eligible:  (1) refugees in the
country fewer than 6 years and (2) lawful permanent residents who are
75 years old and older and who have been in the country 5 years or
more.  The provisions of this proposal would go into effect 1 year
after enactment with no grandfathering provision. 

In contrast, the administration's proposal would increase the time
period that sponsors' incomes would be deemed available to immigrants
receiving AFDC, SSI, or food stamps to 5 years.  After the fifth
year, sponsored immigrants would still receive benefits if their
sponsor's income was below the U.S.  median income.  The proposal
would become effective as of October 1995 and contains a grandfather
clause protecting current recipients.  Table 1 provides more detailed
information on these two proposals. 



                           Table 1
           
               Comparison of Two Welfare Reform
                          Proposals

Current policy      H.R. 4              Administration
------------------  ------------------  --------------------
Eligibility
------------------------------------------------------------
Lawful permanent    Lawful permanent    Lawful permanent
resident            resident, 75 years  resident
Refugees            old or older, and   Refugees
Asylees             resided in the      Asylees
Other PRUCOL        United States at    Other PRUCOL
(categories vary    least 5 years.      (stricter,
slightly between                        standardized
SSI and AFDC        Refugees            categories for all
programs)                               programs)


Time Limits for Receipt
------------------------------------------------------------
No limits           Six years after     Five years after
specified           entering the        entering the United
                    United States,      States, sponsored
                    refugees are no     immigrants are not
                    longer eligible.    eligible unless
                                        their sponsor's
                                        income is below the
                                        U.S. median family
                                        income.


Deeming
------------------------------------------------------------
SSI: Recently       Not applicable.     Five-year deeming
extended from 3 to                      period for both SSI
5 years (reverts                        and AFDC.
back in 1996).

AFDC: 3 years.

Other

                    Public assistance   Allows state and
                    agencies must       local public
                    report illegal      assistance programs
                    aliens with         to disqualify any
                    citizen children    immigrant who is
                    to INS.             disqualified from
                                        federal programs.
                    Goes into effect 1
                    year after          Grandfather clause;
                    enactment with no   that is, current
                    grandfathering      recipients would
                    provision.          still receive
                                        benefits as long as
                                        they remained
                                        continuously
                                        eligible.
------------------------------------------------------------

--------------------
\4 Implementing SSI regulations define a PRUCOL immigrant as an alien
residing in the United States with the knowledge and permission of
the INS and whose departure the INS does not contemplate enforcing. 
(20 C.F.R.  ï¿½ 416.1618.)


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

To determine the number and characteristics of immigrants receiving
SSI and AFDC benefits, we analyzed data from SSI and AFDC
administrative files, as well as published data from INS and the
Bureau of the Census.  To identify trends in immigrant and citizen
use of SSI and AFDC, we reviewed published administrative data from
1983 through 1993.  We used published data from INS's 1992 and 1993
Statistical Yearbooks and the March 1994 Supplement of the Census
Bureau's Current Population Survey (CPS) to provide background on
overall immigration.  The March 1994 CPS reports recipiency data for
1993. 

To identify the characteristics of immigrant recipients who could
lose benefits under the proposals, we reviewed current SSI and AFDC
policies and four key welfare reform proposals.  We also analyzed
1993 AFDC administrative data and SSI administrative data for
December 1993.  In addition, we reviewed a published study by the
Social Security Administration (SSA)\5 that included information
about immigrants' use of SSI's aged, blind, and disabled benefits. 
INS defines immigrants as lawful permanent residents.  For the
purposes of this report, we also included as immigrants other
categories of noncitizens who are eligible for SSI or AFDC: 
refugees, asylees, aliens granted stay of deportation by INS, and
other PRUCOL individuals.  We analyzed immigrant recipients'
immigration status, length of time in the United States, and age--key
characteristics in determining eligibility under the welfare reform
proposals. 

To determine the impact of restricting or eliminating benefits for
immigrants, we reviewed four key welfare reform proposals.  We used
H.R.  4 and the administration's proposal as examples of the range of
options available.  To assess the impact of the proposals on
immigrants and their families, we interviewed officials from the SSI
and AFDC programs and from INS, researchers from public policy
groups, and state and local government officials with information
about immigrants' utilization of assistance programs. 


--------------------
\5 Scott, Charles, and Elsa Ponce, Aliens Who Receive SSI Payments,
The Social Security Administration, Office of Supplemental Security
Income (March 1994).  Included with disabled immigrant recipients are
blind recipients, who represent 1.4 percent of all SSI recipients. 


   LEGAL IMMIGRANTS MORE LIKELY TO
   RECEIVE BENEFITS THAN CITIZENS
------------------------------------------------------------ Letter :4

Overall, immigrants as a group are more likely than citizens to be
receiving SSI or AFDC benefits.  Based on CPS data, immigrants
receiving SSI or AFDC represented about 6 percent of all immigrants
in 1993; in contrast, about 3.4 percent of citizens received such
assistance.\6 However, the total number of immigrants receiving SSI
or AFDC is much lower than the number of citizens because legal
immigrants represent only about 6 percent of the U.S.  population. 
Based on 1993 administrative data, an estimated 18.6 million citizens
received SSI or AFDC, compared with an estimated 1.4 million legal
immigrants. 

Much of the difference in recipiency rates between immigrants and
citizens can be explained by differences in their demographic
characteristics and household composition.  Immigrants are much more
likely than citizens to be poor.  In 1993, about 29 percent of
immigrant households reported incomes below the poverty line,
compared with 14 percent of citizen households.  Researchers have
noted that immigrant households have larger numbers of small children
and elderly or disabled persons and contain more members with
relatively little schooling and low skill levels.  These are all
characteristics that increase the likelihood of welfare recipiency. 
Public policy has also played a role in immigrants' receipt of public
assistance.  Refugees and asylees are categories of immigrants who
are much more likely to be on welfare than citizens or other
immigrants.  By virtue of their refugee or asylee status alone, they
qualify immediately for assistance programs that may be restricted to
other immigrants. 

Almost 83 percent of all immigrants receiving SSI or AFDC in 1993
resided in four states:  California, New York, Florida, and Texas. 
This is not surprising given that over 68 percent of all immigrants
resided in these states.  Over one-half of the immigrants receiving
these benefits lived in California.  (See table 2.)



                          Table 2
          
          Percent of All Immigrants and Immigrant
           Recipients, by Selected States (1993)

                    Percent of all          Percent of all
State                   immigrants    immigrant recipients
----------  ----------------------  ----------------------
California                    38.2                    52.4
New York                      12.6                    18.2
Florida                        8.9                     8.2
Texas                          8.6                     4.1
==========================================================
Subtotal                      68.3                    82.9
All other                     31.7                    17.1
 states
----------------------------------------------------------
Source:  CPS, March 1994. 


--------------------
\6 We note that the CPS is based on a sample of all those over 15
years old in the interviewed household.  Children under 15 are not
included and, thus, our estimate does not completely represent the
SSI and AFDC populations. 


   IMMIGRANTS REPRESENT A GROWING
   PERCENTAGE OF SSI AND AFDC
   CASELOADS
------------------------------------------------------------ Letter :5

As a percentage of all SSI recipients, immigrants receiving SSI
benefits have increased dramatically.  The percentage of SSI
recipients who were immigrants nearly tripled between 1983 and 1993,
rising from 3.9 to 11.5 percent.  This rise occurred because the
number of immigrants receiving SSI grew at a much faster rate than
the number of citizen recipients.  The number of immigrants receiving
SSI increased from 151,207 to 683,178 while the number of citizen
recipients increased from approximately 3,750,300 to 5,301,200.  In
total, immigrants received an estimated $3.3 billion in SSI benefits
in 1993.\7

Between 1983 and 1993, the number of immigrants receiving aged
benefits quadrupled (106,600 to 416,420), while the number of
citizens receiving aged benefits decreased by 25 percent (1,408,800
to 1,058,432).  Consequently, aged immigrant recipients grew from 7.0
to 28.2 percent of all aged recipients.  Over the same time period,
the number of immigrants receiving disabled benefits increased
six-fold (44,600 to 266,730), while the number of citizens receiving
disabled benefits increased by 81 percent (approximately 2,341,500 to
4,242,800).  As a result, the percentage of disabled immigrants more
than tripled, rising from 1.9 to 5.9 percent of all disabled
recipients.  (See fig.  1.)

   Figure 1:  Immigrants' Receipt
   of SSI Benefits Has Grown
   (1983-93)

   (See figure in printed
   edition.)

Note:  A logarithmic scale was used to illustrate relative rather
than absolute changes in numbers of recipients. 

Source:  SSA, 1993. 

Immigrants as a percentage of all AFDC recipients grew at a lower
rate than immigrants receiving SSI benefits.  Adult immigrants
receiving AFDC increased from 5.5 to 10.8 percent between 1983 and
1993.\8 In 1993, almost 722,000 immigrants, including adults and
children, received an estimated $1.2 billion in AFDC benefits.\9


--------------------
\7 Estimated by multiplying the total number of immigrants receiving
SSI by the average SSI monthly payment to immigrants, times 12 months
((683,178 x $407.33) x 12)).  Data were not available to estimate
1983 benefits. 

\8 Published data on immigrant children receiving AFDC benefits are
not available for any time before 1991. 

\9 Estimated by multiplying total number of immigrants receiving AFDC
by the average AFDC monthly payment per recipient, times 12 months
(721,826 x $133.00) x 12)).  Data were not available on 1983
recipients. 


   CHARACTERISTICS OF IMMIGRANT
   RECIPIENTS VARY BY PROGRAM
------------------------------------------------------------ Letter :6

The characteristics of immigrants receiving SSI and AFDC differ, but
data limitations prevent a complete analysis.  Available data show
that SSI immigrant recipients are more likely than citizens to be 75
years old or older--the age that H.R.  4 uses to determine
eligibility.  Most AFDC families containing immigrant recipients also
contain citizen recipients.  Only the immigrants in these families
would lose benefits under some of the proposals--the citizen members
of these families would remain eligible.  Compared with SSI
recipients, AFDC recipients are more likely to be refugees.  However,
available data provide an incomplete picture of immigrant recipients,
and even less is known about their sponsors. 


      IMMIGRANTS RECEIVING SSI
      MORE LIKELY TO BE 75 YEARS
      OLD OR OLDER
---------------------------------------------------------- Letter :6.1

As noted earlier, immigrants account for an increasingly greater
percentage of the SSI aged program.  Moreover, immigrant recipients
are more likely than citizen recipients to be 75 years old or older. 
In 1993, 26 percent of immigrants on SSI aged benefits were 75 years
old or older; in contrast, 15.3 percent of citizen SSI recipients
were 75 years old or older. 

Most immigrants receiving SSI are lawful permanent residents, and
many have been in the country for over 5 years.  Among immigrants
receiving SSI benefits in 1993, over 76 percent were lawful permanent
residents, 18 percent were refugees or asylees, and 6 percent were
other PRUCOL immigrants.  (See fig.  2.) Of lawful permanent
residents, over 56 percent had been in the country for 5 years or
longer.  About 10 percent of lawful permanent residents were 75 years
old or older and had been in the country for 5 years or longer.  Over
14 percent of refugees had been in the country for 6 years or longer. 

   Figure 2:  Status of Immigrants
   Receiving SSI

   (See figure in printed
   edition.)

Source:  SSA, 1993. 

Questions have been raised about the growing numbers of elderly
immigrants receiving SSI and the extent to which these immigrants
entered the United States with a financial sponsor.  While we cannot
determine the extent to which immigrants receiving SSI are sponsored,
SSA's data suggest that some immigrants apply for SSI benefits
shortly after a deeming period would have expired.  Analyses by SSA
researchers indicate that about 25 percent of lawful permanent
residents who applied for SSI benefits since 1980 applied soon after
3 years of U.S.  residency; that is, soon after the sponsor's promise
of support would have expired. 


      MOST AFDC FAMILIES WITH
      IMMIGRANTS ALSO CONTAIN
      CITIZEN RECIPIENTS
---------------------------------------------------------- Letter :6.2

Discussing the immigration status of AFDC recipients is complicated
because AFDC is a family-based benefit, and each family member could
have a different immigration status.  Most AFDC households containing
at least one immigrant also contain a citizen.  Of AFDC households
with at least one immigrant recipient, only about 19 percent
contained no citizen (that is, all members of the household were
immigrants).  For example, over 64 percent were headed by an
immigrant adult with at least one citizen child.  In about 9 percent
of the households containing immigrants, at least one adult is a
citizen and at least one child is a citizen.  (See fig.  3.)

   Figure 3:  Composition of AFDC
   Households Containing at Least
   One Immigrant

   (See figure in printed
   edition.)

\a Others may include pregnant women receiving AFDC benefits.  Some
states provide benefits to pregnant females in their third trimester
if they have no other children. 

Source:  Department of Health and Human Services, 1993. 

Most immigrants receiving AFDC were either lawful permanent residents
or refugees or asylees.  Data on all immigrant recipients showed that
65.3 percent--over 471,000--were lawful permanent residents and
almost 32.5 percent--over 234,000--were refugees or asylees.  The
remaining immigrant recipients fall into other PRUCOL categories. 
(See fig.  4.)

   Figure 4:  Status of Immigrants
   Receiving AFDC

   (See figure in printed
   edition.)

Source:  Department of Health and Human Services, 1993. 


      LIMITED DATA HINDER ANALYSIS
      OF IMMIGRANTS AND THEIR
      SPONSORS
---------------------------------------------------------- Letter :6.3

No one source provides all the data needed to fully describe the
characteristics of immigrants receiving benefits or of their
sponsors.  Administrative data from the SSI and AFDC programs may not
have a recipient's current immigration status if an immigrant's
status changed and the immigrant did not notify the agency.  For
example, lawful permanent residents can become citizens after 5 years
of residing in the United States and meeting other INS criteria, and
refugees and asylees can become lawful permanent residents after a
1-year residency in the United States.  Further, AFDC administrative
data do not contain information on how long an immigrant recipient
has resided in the United States. 

Additionally, computerized data on sponsors, their incomes, the
amount of financial support they provide, and the number of
immigrants they are sponsoring are not available from administrative
sources or the INS.  SSI's new automated application system collects
information on sponsors but it cannot currently aggregate the data
for national analyses.  The AFDC program does not have any
computerized data on sponsors of immigrant recipients.  INS collects
this information when an immigrant first enters the country but the
data are not computerized.  Given these data limitations, we were
unable to assess the extent to which immigrants are relying on
sponsors for financial assistance or determine sponsors' ability to
support sponsored immigrants. 


   THE IMPACTS OF WELFARE REFORM
   PROPOSALS VARY
------------------------------------------------------------ Letter :7

The estimated number of immigrants affected by welfare reform
proposals varies.  H.R.  4, which eliminates eligibility for certain
categories of immigrants, would eliminate benefits to the largest
number of immigrant recipients.  The impact of the administration's
proposal, which would increase the sponsor's responsibility for
supporting immigrants, is difficult to determine.  Last year, CBO
estimated cost savings for these two proposals.\10 If these proposals
were enacted, immigrants might change their behavior by, for example,
applying for state-funded public assistance, naturalizing more
quickly, or changing their immigration patterns. 


--------------------
\10 CBO estimated the cost savings for the Responsibility Empowerment
Support Program Providing Employment, Child Care, and Training Act
(H.R.  3500), which was reintroduced during the 104th Congress as
H.R.  4. 


      POTENTIAL FEDERAL SAVINGS OF
      $10 BILLION OVER 4 YEARS IF
      SSI AND AFDC ELIGIBILITY ARE
      ELIMINATED
---------------------------------------------------------- Letter :7.1

Under H.R.  4, only two groups of immigrants would remain eligible
for benefits--refugees residing in the country fewer than 6 years and
lawful permanent residents 75 years old or older who have resided in
the United States for at least 5 years.  An estimated 522,000
immigrants receiving SSI and an estimated 492,000 immigrants
receiving AFDC--mostly lawful permanent residents--are in categories
that lose eligibility under this proposal.\11 In addition, some of
the approximately 230,000 refugee recipients may no longer be
eligible if they had resided in the United States for 6 years or
longer. 

CBO estimated that federal savings from this proposal for the SSI and
AFDC programs would be $9.2 billion and $1 billion, respectively,
over the period 1996-99.  Adjusting administrative data to account
for naturalizations, CBO estimated that 390,000 immigrants receiving
SSI and 400,000 immigrants receiving AFDC would lose eligibility
under this proposal.  Greater federal savings are expected from the
SSI program because SSI (1) provides a higher average monthly benefit
per person--$407 for SSI immigrants, compared with $133 for AFDC; and
(2) SSI benefits are solely a federal expenditure, while AFDC costs
are shared between the federal government and the states.  CBO
estimated federal savings of $21.7 billion from all the public
assistance programs affected by this proposal including the SSI,
AFDC, Food Stamp, and Medicaid programs.\12


--------------------
\11 These estimates make no adjustment for limitations of
administrative data that may overstate the number of legal immigrants
receiving benefits.  As noted above, administrative data may not have
a recipient's current immigration status if an immigrant's status
changed and the agency was not notified.  INS data that track
immigrants over time suggest that at least 20 percent eventually
become citizens. 

\12 The Food Stamp Program was designed to increase the food
purchasing power of eligible low-income households to a point where
they could buy a nutritionally adequate low-cost diet.  Medicaid is a
federal-state matching entitlement program providing medical
assistance for low-income persons who are aged, blind, disabled,
members of families with dependent children, and certain other
pregnant women and children.  In general, AFDC and SSI recipients are
eligible for food stamps and Medicaid. 


      SPONSORSHIP PROPOSAL
      DIFFICULT TO ASSESS
---------------------------------------------------------- Letter :7.2

Determining the impact of extending the amount of time a sponsor's
income is deemed available for the immigrant is difficult because of
a lack of computerized data on sponsors, their income, and the number
of immigrants they are sponsoring.  Recognizing these limitations,
CBO estimated that the administration's proposal would save nearly
$2.9 billion in SSI, Medicaid, and AFDC benefits over the next 4
years.  CBO estimated that more than 80 percent of these savings
would come from the SSI program.  An additional $400 million over 4
years would be saved by tightening SSI, Medicaid, and AFDC
eligibility standards for immigrants to conform with stricter Food
Stamp program criteria. 


      RESTRICTIONS MAY INFLUENCE
      IMMIGRANTS' BEHAVIOR
---------------------------------------------------------- Letter :7.3

While determining exactly how immigrant recipients will be affected
by the various welfare reform proposals is difficult, these changes
may have some effect on immigrants' behavior.  No studies have
quantified these effects; however, experts have suggested a number of
possible outcomes.  For example, some immigrants who lose eligibility
may find themselves financially worse off.  Other immigrants may find
ways to increase their income by increasing their work effort or
relying more heavily on their sponsors (if they have one) for
financial support.  Also, immigrants may supplement their incomes by
applying for state-funded public assistance or seek changes in their
naturalization status that would result in the reinstatement of their
benefits. 

Immigrants who lose eligibility for federal welfare programs may turn
to state-funded public assistance programs, thus shifting costs to
the states.  State general assistance programs would be unable to
restrict benefits to legal immigrants losing federal eligibility. 
According to the 1971 Supreme Court ruling in Graham v.  Richardson,
states cannot categorically restrict legal immigrants from receiving
state benefits.\13 As of 1992, state- or county-funded public
assistance programs were operating in 42 states.  California and New
York, two states with high concentrations of immigrants on public
assistance and which operate state general assistance programs, could
be greatly affected.  As a result, the possible savings that states
would accrue from their reduced share of AFDC benefits to immigrants
could be offset by increased costs for state-funded general
assistance. 

Immigrants may also change their naturalization and immigration
patterns.  Eliminating or restricting benefit eligibility may prompt
more immigrants to become citizens to retain their eligibility,\14
according to an Urban Institute study.\15 CBO's $21.7 billion
cost-savings estimate takes into account higher naturalization rates. 
However, the impact of the proposal on naturalization rates is
difficult to predict.  Even higher naturalization rates could lower
actual program savings.  Restricting legal immigrants' eligibility
for benefits may also have longer-term effects on the number and
composition of immigrants entering this country.  Eliminating
benefits for most legal immigrants could prompt some prospective
immigrants to reconsider their decision to seek residence in this
country.  In addition, potential sponsors of immigrants may
reconsider whether they would assist others in entering this country
if doing so may result in additional financial responsibility on the
part of the sponsor, according to an INS official. 


--------------------
\13 Graham v.  Richardson, 403 U.S.C.  365 (1971), prohibits states
from denying benefits to persons based on their status as a legal
alien. 

\14 Some immigrants who meet eligibility requirements may not be
eligible for naturalization because of requirements that the
immigrant be able to read, write, and speak words in ordinary usage
in the English language.  Exceptions are limited to immigrants who
are physically disabled from complying due to a permanent disability
and to older immigrants who have lived in the United States at least
15 years after being admitted as a permanent resident.  (8 C.F.R.  ï¿½
312.1.)

\15 Fix, Michael, and Jeffrey Passel, Immigration and Immigrants: 
Setting the Record Straight, The Urban Institute (Washington, D.C.: 
March 1994). 


---------------------------------------------------------- Letter :7.4

As agreed with your office, we did not obtain written agency comments
but we did discuss the report with program officials at HHS, SSA, and
INS.  We also discussed the contents of the report with the
Congressional Research Service, CBO, and other relevant research
organizations.  The officials generally agreed with the contents of
this report but made some technical comments that we incorporated as
appropriate.  We are sending copies of this report to appropriate
congressional committees, the Secretary of Health and Human Services,
the Commissioner of the Social Security Administration, the
Commissioner of INS, and other interested parties. 

If your or your staff have any questions concerning this report,
please call me on (202) 512-7215.  Other GAO contacts and staff
acknowledgments are listed in appendix I. 

Sincerely yours,

Jane L.  Ross
Director, Income Security Issues


GAO CONTACTS AND ACKNOWLEDGMENTS
=========================================================== Appendix I

CONTACTS

Cynthia M.  Fagnoni, Assistant Director, (202) 512-7202
Karen A.  Brown, Evaluator-in-Charge, (202) 512-7240

ACKNOWLEDGMENTS

In addition to those named above, the following individuals made
important contributions to this report:  John Vocino, Senior
Evaluator; Alicia Puente Cackley, Senior Economist; C.  Robert DeRoy,
Assistant Director (Computer Science); Paula A.  Bonin, Senior
Computer Specialist; Vanessa R.  Taylor, Senior Evaluator (Computer
Science); Steven R.  Machlin, Senior Statistician. 


GLOSSARY
============================================================ Chapter 0


      AFFIDAVIT OF SUPPORT
-------------------------------------------------------- Chapter 0:0.1

Signed by a sponsor for an immigrant as an assurance that the
immigrant will not become a public charge.  Aliens found likely to
become a public charge may not be admitted into the United States
under the Immigration and Nationality Act. 


      AID TO FAMILIES WITH
      DEPENDENT CHILDREN
-------------------------------------------------------- Chapter 0:0.2

The AFDC program provides cash welfare payments for (1) needy
children who have been deprived of parental support or care because
their father or mother is absent from the home continuously,
incapacitated, deceased, or unemployed; and (2) certain others in the
household of a child recipient.  Benefits may also be provided to
needy women in the third trimester of their pregnancy.  States define
need, set their own benefit levels, establish income and resource
limits, and supervise or administer the program.  Federal funds pay
from 50 to about 80 percent of the AFDC benefit costs in a state and
50 percent of administration costs. 


      ASYLEE
-------------------------------------------------------- Chapter 0:0.3

INS defines an asylee as an alien in the United States or at a port
of entry, who is unable or unwilling to return to his or her country
of nationality because of persecution or a well-founded fear of
persecution.  Persecution or the fear thereof may be based on the
alien's race, religion, nationality, membership in a particular
social group, or political opinion.  Asylees apply for status after
entering the United States, and are eligible to adjust to lawful
permanent resident status after 1 year of continuous presence in the
United States. 


      DEEMING
-------------------------------------------------------- Chapter 0:0.4

If a sponsored immigrant applies for public assistance, the income
and resources of the sponsor will be considered or deemed to also be
available to the sponsored immigrant, regardless of whether they are
in fact available to the immigrant. 


      GENERAL ASSISTANCE
-------------------------------------------------------- Chapter 0:0.5

State and locally funded programs designed to provide basic benefits
to low-income people who are not eligible for federally funded cash
assistance.  States, counties, or other local governmental units
determine general assistance benefit levels, eligibility criteria,
and length of eligibility. 


      LAWFUL PERMANENT RESIDENT
-------------------------------------------------------- Chapter 0:0.6

INS defines lawful permanent residents as persons lawfully accorded
the privilege of residing permanently in the United States.  They may
be issued immigrant visas by the Department of State overseas or
adjusted to permanent resident status by the INS in the United
States.  Generally, a lawful permanent resident can apply for
naturalization to become a U.S.  citizen after living in the United
States continuously for 5 years. 


      NATURALIZATION
-------------------------------------------------------- Chapter 0:0.7

INS defines naturalization as the conferring, by any means, of
citizenship upon a person after birth.  Immigrants must meet certain
requirements to be eligible to become naturalized citizens. 
Generally, they must be at least 18 years old, have been lawfully
admitted for permanent residence, and have resided in the United
States continuously for at least 5 years.  They must also be able to
speak, read, and write the English language; demonstrate a knowledge
of U.S.  government and history; and have good moral character. 


      PRUCOL
-------------------------------------------------------- Chapter 0:0.8

This term refers to immigrants who are considered "permanently
residing under color of law." PRUCOL is not an immigration status
provided by INS; rather, it is a term used to indicate many alien
statuses and is used for the purpose of determining eligibility for
AFDC, SSI, and Medicaid. 


      REFUGEE
-------------------------------------------------------- Chapter 0:0.9

INS defines a refugee as any person who is outside his or her country
of nationality and unable or unwilling to return to that country
because of persecution or a well-founded fear of persecution. 
Persecution or the fear thereof may be based on the alien's race,
religion, nationality, membership in a particular social group, or
political opinion.  Refugees apply for status outside the United
States; they are eligible to adjust to lawful permanent resident
status after 1 year of continuous presence in the United States. 


      SUPPLEMENTAL SECURITY INCOME
------------------------------------------------------- Chapter 0:0.10

The SSI program is a means-tested, federally administered income
assistance program authorized by title XVI of the Social Security
Act.  Begun in 1974, SSI provides monthly cash payments in accordance
with uniform, nationwide eligibility requirements to needy aged,
blind, and disabled persons.  The aged are defined as persons 65
years old and older.  The blind are individuals with 20/200 vision or
less with the use of a correcting lens in the person's better eye or
those with tunnel vision of 20 degrees or less.  Disabled individuals
are those unable to engage in any substantial gainful activity by
reason of a medically determined physical or mental impairment
expected to result in death or that has lasted or can be expected to
last for a continuous period of at least 12 months.  Some states
supplement federal SSI payments with state funds. 


      SPONSOR
------------------------------------------------------- Chapter 0:0.11

A sponsor is a person who has signed an affidavit of support on
behalf of an alien seeking permanent residence in the United States. 

