After numerous refusals over three and a half years, the Social Security Administration (SSA) has released the first known public copy of the U.S.-Mexico Social Security Totalization Agreement. The government made the disclosure in response to lawsuits filed under the Freedom of Information Act by TREA Senior Citizens League, a 1.2 million member nonpartisan seniors advocacy group.
The Totalization Agreement could allow millions of illegal Mexican workers to draw billions of dollars from the U.S. Social Security Trust Fund.
A loophole in current Social Security law could allow millions of today’s 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.
If an illegal worker working in the United States today gets a “work authorized” Social Security number through guest worker immigration legislation, the Totalization Agreement, or perhaps just over time, that worker could eventually apply for Social Security benefits once he or she has met 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 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.
The U.S. currently has 21 similar agreements in effect with other nations, which are 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.
“I applaud the persistent efforts of TREA Senior Citizens League to try to get documents from the U.S. Government about the U.S.-Mexico Social Security Totalization Agreement,” said Rep. Walter Jones (R-N.C.). “The American people are finally beginning to get some of the information regarding this Agreement that they have been seeking for so long.”
[Read the Totalization Agreement (6MB PDF file)]