Social Security and Mexico
By Marti Dinerstein, Dana Rohrabacher
There has been much confusing talk about a partially completed agreement between the United States and Mexico on allowing Social Security credits for cross-border workers. Immigration expert Marti Dinerstein presents the plain facts on the proposal, then Representative Dana Rohrabacher from California drives home what's at stake for our country.
What's Really Being Proposed
By Marti Dinerstein
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 an 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 U.S. has entered into what are called "totalization" agreements with 20 different countries.
This is how the agreements work: 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 U.S., 96 percent of workers do.) Most Mexican workers make the decision to migrate to the U.S. on their own; they are not dispatched abroad by their companies. A majority enter the U.S. illegally.
The sheer size of the Mexican-born population in the U.S. is another anomalous aspect of this agreement. In 2000, an estimated 9.2 million Mexicans lived in the U.S. None of the other nations we've established Social Security reciprocity with have even 1 million citizens here, and eight of the countries have such tiny populations in the U.S. 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 ten years of contributions in the U.S., but it takes 24 years to qualify in Mexico. Once eligible, Mexico's financial benefits are not remotely similar to those of the U.S. In Mexico, workers get back exactly what they contributed, plus accrued interest. In the U.S., 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 U.S.; 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 U.S.-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.
Face the Truth
By Dana Rohrabacher
The politics of immigration has been a lethal mix in this country. It's a combination of Republicans who capitulate to huge corporate interests wanting to keep wages down, and Democrats who are looking for a new underclass to justify their positions of expanding government programs, which of course gives them political power. Add to this mix the new McCarthyism-every time people attempt to discuss immigration, they are derided as racists. That tactic has harmed the honest debate of an issue vitally important to this country.
The Pollyannas and ostriches who advocate open borders want Congress to believe three things about their pending Social Security agreement with Mexico-all of which are false. First, proponents want us to believe that it will affect only a small number of people. The Social Security Administration claims the agreement will cover only 50,000 Mexicans. The administration came up with that figure by studying the number of Canadian illegal immigrants. The General Accounting Office has noted with remarkable understatement that the Canadian experience is not a good predictor of our immigration realities with Mexico.
We are talking about huge sums of money-not just for retirement, but for disability payments, premature deaths, caring for the families of illegal immigrants. This is a huge threat to Social Security, and it is an outrageous violation of our obligation to watch out for the senior citizens of the United States. I do not understand why every senior citizen organization in this country is not engaged in this debate. I suspect the answer is that they simply do not realize what is being proposed.
Supporters of totalization want you to believe that it will not become an inducement to further illegal immigration. I don't know whether anyone who makes those claims has taken Economics 101, but the reality is if you pay for something, more of it will be produced. If we spend more money to provide guaranteed lifelong benefits to illegal immigrants, there will be more illegal immigrants. Who in Mexico wouldn't choose to come to America and gain access to U.S. benefits dispensed at U.S. dollar levels, rather than relying on the corrupt and bankrupt retirement system in Mexico?
If Congress passes any kind of illegal immigrant amnesty or guest-worker program, as it has numerous times in the past, every illegal alien who qualifies for amnesty will be qualified for Social Security and will have legal status in the United States. Any of the amnesty or guest worker programs that we have heard about will mean millions and millions of illegal aliens thrown into the Social Security system just when the baby boomers in this country are retiring. All the time they have worked illegally will be credited to their accounts.
America cannot support the whole planet, and Congress has an obligation to look out for our own senior citizens first. This is real: this agreement with Mexico could cost the people we are responsible for taking care of the type of protection and services and resources that they have been promised all of these years by their government.
Congress has one option to stop this insanity. We must pass a law specifically banning work by illegal aliens from qualifying them for Social Security. I have introduced a bill-HR 1631-to prohibit the work histories of non-citizens who are here illegally from being counted toward Social Security earnings. If a bill like this does not pass, a Social Security agreement with Mexico could be a disaster for senior citizens and workers in the United States.
This is not an attack on our friends in Mexico, it's simply a recognition of the fact that they-not American taxpayers-are responsible for watching out for their families and supporting their elderly.
Dana Rohrabacher is a Republican Congressman from California.
