Thursday, January 04, 2007
Illegal Mexican Workers Could Reap Billions From Social Security Totalization Agreement
After numerous Freedom of Information Act (FOIA) lawsuits files during the past three years by the TREA Senior Citizens League (TCSL), the Social Security Administration (SSA) has finally released the first known public copy of the U.S.-Mexico Social Security Totalization Agreement. Full story on the TCSL website. Graphic courtesy of Western Voices World News.
Click HERE to view a copy of the Agreement in PDF format (legibility is poor but mostly readable)
The agreement between the U.S. and Mexico was signed in June 2004, and is awaiting President Bush's signature. Once President Bush approves the agreement, which would be done without Congressional vote, either House of Congress would have 60 days to disapprove the agreement by voting to reject it. However, such rejection is unlikely with both houses of Congress under Democratic control.
However, a loophole in current Social Security law could allow millions of current Mexican workers to eventually collect billions of dollars worth of Social Security benefits for earnings under fraudulent or "non-work authorized" Social Security numbers, putting huge new pressures on the Social Security Trust Fund. The Totalization Agreement does NOT correct this loophole.
If an illegal worker working in the United States today gets a "work authorized" Social Security number through either guest worker immigration legislation, the Totalization Agreement, or perhaps simply with the passage of time, that worker could eventually apply for Social Security benefits upon meeting said eligibility requirements.
In addition, that worker could be able to claim credits for work performed while in the U.S. illegally. The SSA maintains an "earnings suspense file," which tracks wages that cannot be posted to individual workers' records because there is no match for a name and Social Security number. Once an immigrant gains access to a work-authorized Social Security number – whether a legal citizen or not – wages earned while in the U.S. unlawfully could be reinstated to the worker's new Social Security account.
The Congressional Research Service reports the earnings suspense file currently stands at approximately $520 billion. According to the Congressional testimony of SSA Inspector General Patrick P. O'Carroll in February 2006, "We believe the chief cause of wage items being posted to the earnings suspense file instead of an individual's earning record is unauthorized work by non-citizens."
However, Social Security itself is already in financial jeopardy. According to the Social Security Administration, the Social Security Trust Fund will begin paying out more than it is taking in by 2017, and will be exhausted by the year 2040. And TCSL Chairman Ralph McCutchen weighed in on this issue. "The Social Security Administration itself warns that Social Security is within decades of bankruptcy – yet they seem to have no problem making agreements that hasten its demise. Our 1.2 million elderly members didn't sacrifice through difficult times so we could fund millions of workers who crossed the border and decided to work here illegally", said McCutchen.
The Social Security Administration also claims this agreement will cost $105 million in the first few years. However, on his January 3rd program, CNN journalist Lou Dobbs, while interviewing a representative of TCSL, questioned this number, citing the fact that the government is uncertain about the number of illegals in the United States. Click HERE for the complete transcript of his interview.
The U.S. currently has 21 similar agreements in effect with other nations, intended to eliminate dual taxation for persons who work outside their country of origin. All of the agreements are with developed nations with economies similar to that of the U.S.
For example, a worker who turns 62 after 1990 generally needs 40 calendar quarters of coverage to receive retirement benefits. Under totalization agreements, workers are allowed to combine earnings from both countries in order to qualify for benefits. The Agreement with Mexico, like other totalization agreements, would allow workers to qualify with just six quarters, or 18 months, of U.S. coverage.
But Mexico's retirement system is radically different than that of other participating countries. For example, only 40 percent of non-government workers participate in Mexico's system, whereas 96 percent of America's non-government workers do. In addition, the U.S. system is progressive, meaning lower wage earners get back much more than they put in; in Mexico, workers get back only what they put in, plus accrued interest.
And while Mexico is the first "developing" nation with whom the U.S. government is attempting to conclude a totalization agreement, it is not the only developing nation under consideration. On December 4th, 2006, Yahoo News reported with very little fanfare that the U.S. government is attempting to conclude a similar totalization agreement with India. Many Indian emigrants to the U.S. have stolen technical jobs from Americans under the H-1B and L-1 visa programs.
There is still time to influence Congress to oppose the U.S.-Mexico Social Security Totalization Agreement. The TREA Senior Citizens League is conducting a campaign to get people to sign their petition asking Congress to oppose this agreement.
Click HERE to sign the TREA Senior Citizens League petition.
Didn't George Washington warn us against "entangling alliances"?
Tags: politics , brrreeeport , immigration , economics , social security