UMVA has learned that a shocking discovery of 10,000 "phantom employees" exploiting a federal work program has sparked outrage among Republicans, who are now determined to tackle the financial incentives behind a foreign worker pipeline that is costing Americans hundreds of thousands of jobs per year.
The explosive revelation centers around the Optional Practical Training (OPT) extension program, which allows hundreds of thousands of foreign students and employers to work in the US without paying Social Security and Medicare payroll taxes - a significant financial burden that companies are required to pay for domestic workers. This loophole has created a substantial incentive for employers to hire foreign OPT workers over American citizens.
Republican Rep. Glenn Grothman of Wisconsin has taken bold action by introducing a bill, titled the "OPT Fair Tax Act," which aims to eliminate this incentive by requiring employers to pay the same Social Security and Medicare payroll taxes for foreign workers as they do for American workers. By closing this loophole, Grothman believes his bill will help create a more level playing field for American graduates entering the workforce.
The congressman's concerns are echoed by many Americans who feel that the current system puts their own citizens at a disadvantage. Grothman told UMVA that "Americans should not be put at a disadvantage because Washington created a loophole that favors hiring foreign workers over qualified U.S. citizens." He emphasized that "too many young Americans graduating from our colleges and universities are forced to compete against a system that tilts the playing field against them."
Grothman's bill is the House companion to a Senate bill introduced by Sen. Tom Cotton in September, which aims to bring much-needed reforms to the OPT program. The issue has gained significant traction after Acting ICE Director Todd Lyons revealed that federal investigators had uncovered over 10,000 foreign students connected to "suspect employers" as part of a massive fraud scheme involving the program.
Lyons described the OPT program as an "uncontrolled guest worker pipeline" that has ballooned into a system with hundreds of thousands of foreign students working in the US. He warned that "as the program size exploded, so has the fraud," and that the discovery of "phantom employees" - foreign students who obtained work authorization but never actually showed up for work - is just the tip of the iceberg.
The scale of the tax preference is staggering, with data suggesting that between fiscal years 2017 and 2022, an average of approximately 330,000 students participated in OPT annually. Eliminating the tax exemption is estimated to increase federal revenue by between $27 billion and $36 billion over a 10-year period.
Congressman Grothman emphasized that "Congress should be focused on opening doors for young Americans, helping U.S. graduates find good-paying jobs and ensuring employers are encouraged to hire Americans first. Not creating incentives for companies to bypass American talent." He added that "the American people deserve to know how so many questionable employers were able to operate within the system for so long."
