Commentary - Shannon Benton: Social Security deal with Mexico may hasten pension’s end

No wonder. The system’s very own trustees tell us Social Security’s Trust Funds will be exhausted by 2040, barring major changes.

In that spirit, our organization, a nonpartisan group representing 1.2 million seniors, filed a Freedom of Information Act request three years ago with the Social Security Administration for a copy of the U.S.-Mexico Social Security Totalization Agreement, which is intended to eliminate dual taxation for Americans working in Mexico, and which works the same in reverse. Despite years of obstacles and lawsuits, we finally received the first public copy of the agreement late last month.

It doesn’t tell us much. Although the agreement was signed by the Bush administration’s Social Security Commissioner and her Mexican counterpart two years ago and needs only the president’s signature — and Congress’ lack of action — to go into effect, it still doesn’t tell us how much the deal would cost or how it would be paid for.

But here’s what we do know. It would probably cost billions and bankrupt the Social Security system even sooner.

A loophole in a law called the Social Security Protection Act of 2004 would allow aliens who gain “work authorized” Social Security numbers through immigration amnesty legislation, the totalization agreement — or both — to receive benefits, even for work performed in the United States illegally.

In other words, if an alien becomes legal today, he would be able to collect benefits on all reported earnings — legal and illegal — from the time he unlawfully crossed the border and started performing illegal work.

Still, the SSA continues to claim the totalization agreement would cost an average of just $105 million per year over the first five years, significantly less than the U.S. deal with Canada.

When the Government Accountability Office analyzed the estimated costs of the U.S.-Mexico deal, it found that the costs were “highly uncertain,” and that such an agreement could have a “measurable long-term impact on … the trust funds.” Although the GAO recommended that the SSA improve its cost estimates, we have seen no evidence they have done so.

Some critics contend that the mere existence of 21 other totalization agreements demonstrate that a Mexican agreement would pose no real harm. They fail to mention, however, that almost all of the other agreements are with developed nations in Europe and Asia with economies similar to that of the U.S., and that Mexico’s retirement system is radically different from our own.

For example, The U.S. Social Security system is progressive, meaning lower-wage earners, many of whom are today’s illegal workers, get back much more than they put in. In contrast, Mexico’s system offers those same low-wage earners just what they put in, plus accrued interest.

The good news is that Congress is starting to pay attention. Sen. John Ensign, R-Nev., and Rep. Barbara Cubin, R-Wyo., have introduced legislation that, if passed, would require approval from both chambers for future totalization agreements.

It’s bad enough that many of America’s workers are resigned to never seeing their Social Security money upon retirement. They shouldn’t have to also wonder if their honestly earned retirement benefits are being given away to those who illegally cut their place in line.

Shannon Benton is the Executive Director of TREA Senior Citizens League, one of the nation’s largest nonpartisan seniors groups. Visit www.SeniorsLeague.org to read the Totalization Agreement.