There's a Loophole That Allows Illegal Immigrants to Claim Tax Credits, and a GOP Sen. Just Made a Big Move to Close It to Save Vet Benefits (UPDATED)

UPDATE: The Senate on Tuesday voted down the amendment filed by Sen. Jeff Sessions (R-Ala.) that intended to restore proposed cuts to veterans' benefits by closing a benefit loophole for illegal immigrants.

On the near party line vote, the amendment failed by 46-54. Sen. Key Hagan (D-N.C.) joined Republicans on the vote.

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The ranking Republican on the Senate Budget Committee has put forward a budget amendment to avert proposed cuts to veterans' benefits by closing a loophole that allows illegal immigrants to collect child tax credits.

Sen. Jeff Sessions (R-Ala.) is proposing a budget amendment to avert cuts to veterans' benefits. (Getty Images/Alex Wong)

Even though federal law bars illegal immigrants from collecting tax benefits like the earned income tax credit, the current child tax credit provision does not require a tax return to include a Social Security number, which means it's possible for illegals to claim and get the benefits.

Sen. Jeff Sessions (R-Ala.) filed the amendment late Monday hoping to salvage veteran and military retiree pension benefits that are reduced under the current budget agreement. The agreement passed the House of Representatives last week with broad bipartisan support and was being debated in the Senate Tuesday.

"An equivalent amount of savings and more can be easily found, and I hope the Senate will move to address the unbalanced treatment of our service members before considering the legislation any further,” Sessions said in a statement to TheBlaze.

The Treasury Inspector General for Tax Administration noted in a 2011 report that millions of people without valid Social Security numbers received $4.2 billion in the additional child tax credit in 2010 – up from $924 million in 2005.

In 2011, the Treasury Inspector General for Tax Administration reported that illegal aliens received a staggering $4.2 billion in refundable child tax credits in 2010, a Senate aide said.

The cuts to veterans disability benefits was met with anger among a large swath of Republican senators after the budget passed the House last week.

“It has been asserted that the controversial change to military retirees’ pensions affects those who are ‘working-age’ and ‘still in their working years,’ with the clear suggestion being that these individuals are able to work," Sessions said. "That’s why I was deeply troubled when my staff and I discovered that even individuals who have been wounded and suffered a service-related disability could see their pensions reduced under this plan."

Sessions said the budget agreement "spares current civilian workers from the same treatment."

Senior Republican senators were moving Tuesday to get the budget bill passed. It is not clear yet whether the military retiree provision submitted by Sessions will be considered.

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