"Totalization" Could Wreck Social Security
January 24, 2003
If top officials at the State Department and the Social Security Administration (SSA) implement a proposed agreement, the cost of Social Security could balloon by an additional $345 billion over the next two decades -- mostly for Mexican nationals who worked in the United States illegally, claims a report in National Review.
The proposed agreement, known as "Totalization," would combine the taxes paid into America's and a foreign country's respective social-security systems -- thus allowing people who split their careers between two countries to get retirement benefits from both.
The United States has such agreements with 20 countries. This pack, however, would differ by allowing illegal immigrants to claim credit for work performed using false Social Security numbers, says author Joel Mowbry.
The Totalization Agreement would have the greatest effect on disability benefit claims, where there are strong incentives for fraud. For example, if a 24-year-old-Mexican national who has worked illegally in the United States for three years presents documents from a friendly doctor and either a W-2 or pay stubs that indicate $12,000 in annual earnings, he will be eligible for the following benefits:
- Nearly $8,000 per year in disability income (adjusted for inflation), until age 65, at which point he would receive the same amount as retirement pay.
- If he is survived by his wife or dependents, his family would be able to receive up to almost $12,000 annually.
- If he dies at 60, and his widow lives to 85, U.S. taxpayers will be on the hook for nearly a half-million dollars.
That's for only one worker brought into Social Security by the pact. Currently, there are between 7 and 11 million illegals in the United States -- about half of whom are from Mexico.
Source: Joel Mowbry, "Illegal but Paid? The Question of Social Security for Mexicans," National Review, January 27, 2003.
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