Thread: Bush Plan: Social Security for 'Legalized' Illegal Aliens

http://www.townhall.com/news/ext_wire.html?rowid=46249

Bush Plan: Social Security for 'Legalized' Illegal Aliens
By Jeff Johnson

Dec 8, 2005

(CNSNews.com) - Illegal aliens who work under borrowed, stolen or fraudulent Social Security numbers could collect retirement benefits based on their illegal earnings as the result of a Bush administration plan. Critics charge the federal government has grossly underestimated the cost of the proposal, which they believe could run be billions of dollars per year.

Congress is expected to vote on some combination of proposed changes to immigration laws as early as next week, according to sources working with the House Homeland Security and Judiciary committees. While members have not been able to reach agreement on the details of a temporary or "guest worker" program advocated by President Bush, the White House might use the legislative opportunity to seek approval for an International Social Security Agreement with Mexico, something it has wanted for more than two years.

Mark Kirkorian, executive director of the Center for Immigration Studies, told Cybercast News Service that the arrangements, usually called "totalization agreements," with industrialized countries like Canada, the United Kingdom and even France are beneficial. But those benefits, he argued, would not come from an agreement with Mexico.

"The point to a totalization agreement is for two advanced countries that occasionally send corporate transferees from one country to the next for a two or three year stint to be able to reconcile their respective retirement systems," Kirkorian said. "It's not for a third world country that sends millions of peasants into a developed country to take advantage of; there's a complete mismatch, an imbalance."

Kirkorian points out a number of differences between the U.S. and Mexican Social Security systems including:

Workers are vested in the U.S. system in 10 years versus 24 years in Mexico;
The U.S. pays greater benefits to lower income workers whereas Mexico pays out only the premiums paid in, plus accrued interest; and
Most Mexican workers avoid their country's Social Security system by working in the "underground economy," while most U.S. workers have Social Security taxes automatically collected from their wages.

The U.S. has entered into totalization agreements with 20 countries since 1978. The Social Security Administration (SSA) describes the arrangements on its website:

"[These] agreements have two main purposes. First, they eliminate dual Social Security taxation -- the situation that occurs when a worker from one country works in another country and is required to pay Social Security taxes to both countries on the same earnings," the SSA site explains. "Second, the agreements help fill gaps in benefit protection for workers who have divided their careers between the United States and another country."

Congress does not have to give approval for the totalization agreements, but lawmakers are given the opportunity to vote them down. SSA Commissioner Jo Anne Barnhart explained the benefits of totalization for U.S. employers and employees during her Sept. 11, 2003 testimony to the House Judiciary Subcommittee on Immigration, Border Security and Claims.

"Without totalization the combined Social Security tax rate that U.S. employers and employees working in foreign countries must pay often approaches 40 percent or more of total payroll," Barnhart testified.

In March of 2003, the SSA's Office of the Chief Actuary estimated that a totalization agreement with Mexico would cost the U.S. $78 million in the first year, growing to $650 million (in constant 2002 dollars) by 2050. That determination assumed that the initial number of newly eligible Mexican recipients would be equal to the 50,000 beneficiaries then living in Mexico, and that the eligible number would grow to only 300,000 over the next 48 years.

But the agency now known as the Government Accountability Office (GAO) GAO report disputed that estimate.

"[T]his proxy figure does not directly consider the estimated millions of current and former unauthorized workers and family members from Mexico and appears small in comparison with those estimates," the GAO determined. "The estimate also inherently assumes that the behavior of Mexican citizens would not change and does not recognize that an agreement could create an additional incentive for unauthorized workers to enter the United States to work and maintain documentation to claim their earnings under a false identity."

Kirkorian believes those would be the unintended consequences of the president's proposed "guest worker" program.

"If the president gets his way and [those illegal aliens are] legalized, and he submits this totalization agreement to Congress," Kirkorian warned, "then all of the illegal aliens who get this 'amnesty' that he wants, get to count all of their Social Security payments when they were illegal toward their eventual retirement."

Barnhart told the congressional subcommittee that such an outcome could not happen.

"As is the case with our existing agreements, a totalization agreement with Mexico would not alter current law on this issue," Barnhart testified. "Totalization agreements do not have any effect on the prohibition against payment of benefits to illegal aliens in the United States."

But if Congress approves the president's "guest worker" plan, the "adjusted" status of previously illegal employees would mean that they would no longer be excluded from eligibility for Social Security payments.

"What they want is for illegal aliens who 'adjust' to some kind of legal status to be able to count their illegal work toward Social Security," Kirkorian said. "That's not up for contention, that's just a fact. The Social Security Administration negotiated the agreement, already, with Mexico."

A March 2003 report by the Social Security Administration's Office of the Inspector General (SSA-OIG) validates Kirkorian's concern.

"SSA's practice allows non-citizens to work illegally in the U.S. economy for a number of years, eventually acquire a valid SSN and have these earnings posted to their valid SSNs, and then receive [Social Security] benefits as a result of those earnings," the inspector general reported. "SSA does not consider the work-authorization status of the individual when they earned the wages; it only considers whether the individual can prove he or she paid Federal Insurance Contribution Act (FICA) taxes as part of this work."

Data from the 2000 Census indicate that 9.1 million Mexican citizens are living in the United States, 4.8 million of them illegally. The SSA-OIG report speculated about the impact that those illegal aliens could have if they became eligible for U.S. Social Security benefits.

"If these Mexican non-citizens are also working in the United States illegally, and an amnesty and/or totalization agreement occurs," the report warned, "SSA potentially may need to reinstate a large volume of [Social Security taxes paid under false or fraudulent account numbers] based on earlier unauthorized work."

Marti Dinerstein, president of Immigration Matters, also criticized the SSA in a September 2004 report entitled "Social Security 'Totalization' - Examining a Lopsided Agreement with Mexico," for using Canada as the model for its Mexican totalization cost estimates.

"The estimated number of Canadians living in the United States is 820,000," Dinerstein wrote. "Given the fact that a totalization agreement would cover not just Mexican workers but also their spouses and dependents, it is highly likely that over time, potentially millions of people would receive U.S. Social Security benefits and the cost would be in the billions of dollars."

"It's pretty ludicrous, frankly," Kirkorian concluded. "Mexico is just not the kind of country that you should be having this kind of agreement with."

The White House did not return calls seeking comment for this article.

Make media inquiries or request an interview with Jeff Johnson.

Can we please impeach this guy already?

So that is in addition to this?


http://www.ssa.gov/pressoffice/factshee ... Mexico.htm

UNITED STATES/MEXICO TOTALIZATION AGREEMENT
June 2004 (Printer Friendly Version) (AquÃÂ* en Español)
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Totalization

* Since the late 1970’s, the U.S. has established international social security agreements that coordinate the U.S. Social Security program with the comparable programs of other countries.
* These international social security agreements are called “totalization agreements� and have two main purposes:
o Eliminate dual social security taxation that occurs when a worker from one country works in another country and is required to pay social security taxes to both countries on the same earnings. As a result of existing totalization agreements, U.S. workers and employers currently are saving about $800 million annually in foreign taxes they do not have to pay.
o Help fill gaps in benefit protection for workers who have divided their careers between the U.S. and another country, but who have not worked long enough in one or both countries to qualify for social security benefits. With totalization, workers are allowed to combine work credits from both countries to become eligible for benefits. The benefit amount paid is proportional to the amount of credits earned in the paying country.

An agreement with Mexico

* An agreement with Mexico would save U.S. workers and their employers about $140 million in Mexican social security and health insurance taxes over the first 5 years of the agreement.
* An agreement would also fill the gaps in benefit protection for U.S. workers who have worked in both countries, but not long enough in one or both countries to qualify for benefits.
* Mexico is the second largest trading partner with the U.S. Agreements are already in effect with Canada, the largest trading partner with the U.S., and 19 other countries.
* With Mexico, the U.S. now has signed agreements with eight of its top ten trading partners. Many of these agreements have been in effect for nearly two decades. The two exceptions are China and Taiwan. By law, the U.S. could not enter into agreements with these two countries because they do not have generally applicable social security systems that pay periodic benefits or the actuarial equivalent.

vCosts of an agreement with Mexico [/b]

* Social Security actuaries estimate that a totalization agreement with Mexico would have a negligible long-range effect on the Trust Funds.
* Costs to the U.S. Social Security system are estimated to average about $105 million per year over the first five years. These costs are for additional benefits to eligible U.S. and Mexican workers and reduced Social Security tax contributions under the dual taxation exemption.
* To put this in perspective, in 2002, costs to the U.S. system for the existing agreement with Canada were about $197 million.

Effective date of an agreement with Mexico

* In the United States, once the agreement is signed, the President will submit the agreement to Congress where it must sit in review for 60 session days. If Congress takes no action during this time, the agreement can move forward.
* In Mexico, once the agreement is signed, the Mexican Senate must approve it.

Countries already having totalization agreements with the U.S.

* The United States currently has Social Security agreements with Canada, Chile, South Korea, Australia and most of Western Europe.

Country Effective Date Country Effective Date
Italy November 1, 1978 Portugal August 1, 1989
Germany December 1, 1979 Netherlands November 1, 1990
Switzerland November 1, 1980 Austria November 1, 1991
Belgium July 1, 1984 Finland November 1, 1992
Norway July 1, 1984 Ireland September 1, 1993
Canada August 1, 1984 Luxembourg November 1, 1993
United Kingdom January 1, 1985 Greece September 1, 1994
Sweden January 1, 1987 South Korea April 1, 2001
Spain April 1, 1988 Chile December 1, 2001
France July 1, 1988 Australia October 1, 2002

More detailed information about these totalization agreements can be found at http://www.socialsecurity.gov/international/

Social Security and Mexico: A Travesty
What's Really Being Proposed

By Marti Dinerstein

The American Enterprise
January/February 2005

Social Security agreements between countries are meant to accomplish two things: One is to prevent dual taxation of employees who work temporarily in another country and the employers who send them. The second is to guarantee and old-age pension to workers who end up paying into the Social Security systems of two countries, but earn insufficient credits to qualify for retirement from either of those countries alone.

Previous cross-country agreements on Social Security credits have benefited American workers and their employers , as well as foreign workers sojourning here, and the U.S. Congress has never voted against one. Since the 1970s, the United States has entered into what are called �totalization� agreements with 20 different countries.

This is how the agreement works: A corporation asks an employee to work abroad for a specified period of time. Both the employee and the employer have been paying Social Security taxes in the home country. Employees enter the foreign country legally with appropriate authorization, and leave when their temporary assignments are over. When the employees retire, they are eligible to collect benefits based on the total number of years worked in each country.

The proposed totalization agreement with Mexico, however, is a perversion of the 20 existing agreements that have been structured along these lines. Most Mexicans do not contribute to Mexico�s retirement system; (only 40 percent of non-government workers participate in their country�s social security system in any way; in the United States, 96 percent of workers do.) Most Mexican workers make the decision to migrate to the United States on their own; they are not dispatched abroad by their companies. A majority enter the United States illegally.

The sheer size of the Mexican-born population in the United States is another anomalous aspect of this agreement. In 2000, an estimated 9.2 million Mexicans lived in the United States, None of the other nations we�ve established Social Security reciprocity with have even one million citizens here, and eight of the countries have such tiny populations in the United States that the Census Bureau doesn�t even track their numbers.

This pact is utterly one-sided�in Mexico�s favor. The benefits to U.S. workers and their employers are miniscule compared with the windfall this proposal would yield for millions of Mexicans. There is no benefit parity.

One becomes entitled for a lifelong Social Security pension after just 10 years of contributions in the United States, but it takes 24 years to qualify in Mexico. Once eligible, Mexico�s financial benefits are not remotely similar to those of the United States. In Mexico, workers get back exactly what they contributed, plus accrued interest. In the United States, the Social Security system is progressive, with lower-wage earners receiving benefits far in excess of what they contributed. Therefore, any program that accepts a huge number of low-wage retired workers from a foreign country will create a giant drain on the U.S. Social Security trust fund, which is already on a path to fall into the red in just 15 years.

Not one of the foreign countries we have so far negotiated Social Security agreements with accounts for even 1 percent of the illegal-alien population in the United States; in fact, all 20 together account for only 4 percent of our illegal aliens. Mexico, on the other hand, accounts for 69 percent.

Any Social Security exchange with Mexico�a country at a fundamentally different level of development from the United States�will cost Americans a king�s ransom. Such an agreement would overwhelmingly dwarf the total costs of all our other existing agreements combined. An agreement with Mexico in this area is simply not in our national interest. The risks are far too great.

Marti Dinerstein is a Fellow at the Center for Immigration Studies.

I can see "Presidente Vicente" at work again. It looks more and more like HE is the President of the US.

Originally Posted by Bootsie

I can see "Presidente Vicente" at work again. It looks more and more like HE is the President of the US.

Exactly and Bush is just a puppet for him.

Vicente to Jorge: Open your borders now.

Jorge to Vicente: Yes Master.

Si, Si, Senor! Ask and ye shall receive!

Originally Posted by dman1200

Can we please impeach this guy already?

I agree dman.

No one in Congress has the guts to stand up and put forth a bid for impeachment.

And if I'm wrong, Please tell me who this person is!!