Posted on 08/26/2004 4:52:39 PM PDT by AuntB
Rep. Dana Rohrbacher spoke today about his bill to stop various republicans, democrats and special interest groups from bestowing Social Security benefits to illegal aliens on CNN's Lou Dobb's program.
Though Mr. Rohrabacher's bill doesn't go far enough to address the crisis of illegal immigration, he did bring up many interesting points. Legislation, on a bi-partisan effort, is asking to give illegals Social Security benefits only after earning 6 quarters of work credit, whereas U.S. citizens must work 40 quarters to qualify. The absurdity of this is too obvious to debate.
The following is from Rep. Rohrabachers website.
No Social Security for Illegal Aliens
The federal government is thinking about giving away Social Security benefits to illegal aliens.
Various interest groups are pushing for the Social Security Administration to sign a "Totalization Agreement" with Mexico that would entitle illegal aliens to Social Security benefits. With Social Security and Medicare in crisis, this is so irresponsible it takes the breath away.
Congress must act, and act now. I have introduced legislation, H.R. 1631, that would forbid any Social Security credits for illegal aliens or work in violation of the terms of a visa. This would emphatically not affect those who have a legal right to work, such as legal permanent residents or those who have valid work visas.
Estimates vary, but even the lowest figures show adding illegal aliens to the Social Security rolls will cost the Social Security Trust Fund billions and billions of dollars. Seniors should ask why anyone would want to give those dollars to illegal aliens, draining funds available for Social Security and Medicare benefits, and reward those who break the law.
Joel Mowbray, who writes for The National Review and The Washington Times has a very disturbing article on this issue. It should send a chill through the heart of anyone concerned about the solvency of Social Security.
My legislation HR 1631:
Forbids anyone working in the United States illegally from being able to participate in the Social Security system.
This includes not only undocumented (illegal) aliens, but anyone working in violation of the terms of their visa. (Someone on a tourist visa, for instance, is excluded.)
Why this legislation is necessary:
Current law is silent on this issue. While the SSA currently will not grant benefits to workers without a valid Social Security number, this is an administrative policy. Unless Congress acts, this policy can legally be changed by the Social Security agency. The U.S. State Department has been pushing for including illegal aliens in the Social Security system to use as a "carrot" to gain the Mexican government's cooperation on various international issues (the war on terrorism, criminal extradition agreements, etc.)
The 2000 Census results show over 11 million illegal aliens living in the United States.
If even one third of these become eligible for Social Security, it will devastate the system.
* Social Security benefits are weighted to give higher proportional benefits to lower wage workers. Most of these illegal aliens are very low wage earners, so they would receive far more than they paid in. * Joel Mobray from The National Review has estimated potential costs at $345 billion dollars * It will be a bookkeeping nightmare. Many illegal aliens create false Social Security numbers, use the Social Security numbers of others, and share both false and "borrowed" Social Security numbers with many others who use them also. Determining a verifiable work history will be impossible. * Making someone eligible for Social Security would also provide benefits to their spouses and dependent children, and not only Social Security but possibly Medicare -- upping the cost of this still further. * It rewards lawbreaking and encourages further illegal immigration. Some "Totalization Agreements" serve a useful function. Large corporations, both in the United States and abroad, often assign personnel to work in an overseas office for several years. During these years, personnel are "double taxed" -- they pay both Social Security and the equivalent tax in their native countries. Allowing the SSA and foreign agencies to give credit under one system toward retirement makes sense when it involves a limited number of persons working here legally and temporarily.
This is NOT the case with illegal aliens. MILLIONS of LAWBREAKERS with UNVERIFIABLE work histories will be added to the system -- causing a financial crisis.
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It should have been called the Incumbent Superiority Act...because it gives people already in public office a super advantage over their under funded challengers.
"This is a hard one to swallow and there are going to be a lot of shocked people, but here's another sad fact of the SSA. Say you are 45 years old. Paid into SSA for 30 years. Your parents are sick and old, so you take 5 years off to care for them. Boom!! Hit by a bus, crippled for life. Guess what......ONLY approximately the last 5 years (NOT the last 5 years worked....the last few years period ), count toward disability benefits....NONE of that 30 years count. NONE of it."
Not quite right.
There are two seperate issues here. The first is establishing "insured status" for the disability benefits. To do that, SSA looks 10 years back from the date you became disabled. If you have at least 20 quarters in those 10 years, then your disability insured status is met. Second, SSA looks over your LIFETIME of earnings and takes between 2 to 20 (approx) years of earnings, (depending on how old you were when you became disabled) adjusts for inflation, averages them out, applies a formula to them, and comes up with your benefit amount. SSA will not use your most recent earnings to detemine the AMOUNT of the benefit but will use recent earnings to determine insured status only.
"So, I wonder what is different about the Mexico case. It seems to me that under a totalization agreement, LEGAL Mexicans working in the US for Mexican companies would contribute to the Mexican system, whatever that is, and NOT the US Social Security system. Of course, if they are working for AMERICAN companies, then obviously they would be covered just as an American would be, and under all the same rules."
If that was the only way totalization worked there would be no harm done. The problem is, there is another part to the totalization process that would suck the trust funds dry.
http://www.socialsecurity.gov/pubs/10180.html
Payment Of Benefits
U.S. Social Security agreements also help people who have worked in both the United States and an agreement country, but who have not worked long enough in one country or the other to qualify for Social Security retirement, disability or survivor benefits. Under an agreement, each country can count your work credits in the other country if this will help you qualify for benefits.
For example, if you have earned some Social Security credits in the United States, but not enough to qualify for a benefit, we can count your credits in an agreement country to make up the difference. If you meet the minimum eligibility requirements based on combined credits from both countries, you will receive a partial U.S. benefit that is proportional to the number of credits you earned in the United States. The other country also can use your U.S. credits to help you meet the eligibility requirements for foreign Social Security benefits.
Although each country may count your work credits in the other country, your credits are not actually transferred from one country to the other. They remain on your record in the country where they were earned. It is therefore possible for a person to qualify for a separate benefit payment from each country.
Yes, I see.
In fact, because I had put in five years working in Korea(the Korean minimum) before the US-Korea Social Security agreement went into effect, and I had reached age 60, I qualified for a Korean pension, which I have been collecting ever since, and which will never reduce or influence my eventual Social Security payments.
I suppose this is an instance of this phenomenon working the other way.
I agree that because of the huge disparity between the minimal value of the contributions and the huge number and value of potential claims, treating Mexico in this way would be fiscally irresponsible.
See post #104 for a partial explaination of totalization. I believe all a person need to earn is 6 quarters before he can combine his work credits from Mexico and USA to get SS benefits.
When an illegal alien works under a fraudulent SSN, they keep the W2s. When they become legal and get a valid SSN, they come into the Social Security office with a slew of W2's and SSA has to add all those W2s to their earnings record. Here is some of the SSA policies for correcting earnings records. It does not explain everything.
http://policy.ssa.gov/poms.nsf/lnx/0103870001!opendocument
It was very common for the alien to get temporary legal status and apply for and get the benefits before the legal status expired. Once they got legal status the benefits could not stop. The law has changed recently. Now it says something like, if you loose your legal status and are caught illegaly working, your benefits will stop. I can't remember exactly what the new law says and am too tired to look it up tonight.
"Besides --- how can someone prove it was themselves and not someone else who was fraudulently using a stolen social security number? What happens when 10 illegals claim to have used the same number for the same 6 quarters? Do all 10 get full benefits?"
The person who was fraudently working has the W2 in hand and submits it to the SSA office.
Yes, but it gets worse.
You probably paid the bare minumun into the Korean system to get benefits. Sure, you will be getting much more out of it then paid in but at least you paid in for 5 years.
Under the totalization a Mexican national would only have to pay into the SSA system 6 quarters (1/2 years) and this year quarters are valued at 900.00. SSA would combine the alien's work credits earned in the US and Mexico, and as long as the alien had also worked a minimal amount in Mexico, he could get prorated SSA benefits. I do not have the amounts the person would have to earn in Mexico. The SSA trust funds would not be reimbursed by the Mexican system even though the alien is using those credits to secure Social Security benefits.
Check it out. SSA's official statement last year.
http://www.ssa.gov/legislation/testimony_091103.html
Social Security Testimony Before Congress
Testimony by Commissioner Jo Anne B. Barnhart
Hearing on International Social Security Agreements Subcommittee on Immigration, Border Security, and Claims
September 11, 2003
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to appear before the Subcommittee to discuss international Social Security agreements, commonly referred to as “totalization” agreements. In my testimony today I will:
Provide an overview on totalization agreements including the process for approval;
Dispel some of the myths and correct misinformation that has appeared in the media in recent months concerning what Social Security totalization agreements are and do, as well as what they do not do;
Bring you up-to date on the status of ongoing negotiations regarding a possible totalization agreement with Japan; and
Provide a status report on our discussions with Mexico.
First, what are Totalization Agreements?
Totalization agreements protect the benefits of workers who pay into the social security systems of two countries but do not earn sufficient credits to receive full benefits from one or both countries. Workers are deemed eligible for pro-rated benefits based on the amount of contributions made to the system of each country. United States totalization agreements include all OASDI programs.
Totalization agreements eliminate dual social security taxation of citizens of one country who are sent by their employer to temporarily work in another country. In addition to Social Security taxes, foreign workers can be exempted from Medicare contributions and U.S. workers can also be exempted from health insurance and other taxes related to employment imposed by a foreign country in which they temporarily work. Individuals from a foreign country who are hired in the United States or were sent to the United States for more than a temporary period would continue to pay FICA taxes.
Without totalization, the combined Social Security tax rate that U.S. employers and employees working in foreign countries must pay often approaches 40% or more of total payroll. Under existing agreements, the annual foreign tax savings of U.S. workers and their employers total more than $800 million. In contrast, the annual U.S. tax savings of foreign workers in the United States and their employers total only about $200 million.
The US has totalization agreements with 20 countries, including Canada and most Western European countries.
Myths:
As I mentioned earlier, there has been a good deal of misinformation about totalization agreements in the media in recent months. Specifically, I have identified what I call “myths” about totalization agreements -- largely related to Mexico -- that have appeared in the media over the last few months. I want to specifically address each of these “myths”.
Myth #1: A totalization agreement with Mexico would change existing immigration policy.
The truth is a totalization agreement does not address immigration laws. The Social Security Administration does not set immigration policy -- and the totalization authority as passed by Congress in 1977 has nothing to do with immigration policy. A totalization agreement only deals with 1) Social Security payroll taxes and other employment-related taxes associated with work performed by U.S. workers hired in the U.S. and sent to work in a foreign country and foreign workers sent to work in the U.S. 2) workers with insufficient work credit earned to become eligible for full benefits in one or both countries.
Myth #2: One result of a totalization agreement with Mexico will be to begin to pay benefits to undocumented or illegal aliens.
As is the case with our existing agreements, a totalization agreement with Mexico would not alter current law on this issue. Totalization agreements do not have any effect on the prohibition against payment of benefits to illegal aliens in the United States.
Myth #3: A totalization agreement with Mexico will cost the United States $345 billion.
$345 billion is the approximate amount of total wages for all workers in the Earnings Suspense File (ESF) since 1937 and has no relationship to the cost of totalization agreements. SSA actuaries estimate the cost of a possible totalization agreement with Mexico to be $78 million in its first year rising to $138 million in its 5th year -- for an average cost of $110 million a year.
Myth #4: All of the earnings in the suspense file came from undocumented -- or illegal -- aliens.
Earnings in the ESF represent wages we are not able to post to a specific individual’s earnings record because the name and Social Security number do not match. Therefore, the suspense file is made up of all earnings that for whatever reason can not be credited correctly to a specific Social Security record.
Name and SSN mismatches can occur for a number of reasons including transcription or typographical errors, name changes due to marriage or divorce, and incomplete or blank name or SSN. While a portion of the ESF represents earnings by undocumented aliens, it also includes earnings from legal aliens and U.S. citizens.
Myth #5: Totalization agreements enable non-citizens who work in the United States for a very short period of time to receive full American Social Security benefits.
False. Totalization agreements provide that the United States will pay pro-rated benefits to those workers who have: (1) between 6 and 39 quarters of coverage with the U.S. system; and (2) a combined work record of at least 10 years in the United States and a partner country. Again, I emphasize, the benefits are paid on a pro-rated basis.
Why Enter Into Totalization Agreements
In 1977, Congress enacted the provisions that authorized the United States to enter into totalization agreements for two basic reasons:
To ensure fairness and equity by providing social insurance for those who -- because they have split their careers between the United States and another country-- might otherwise end up with insufficient credits to become entitled to a benefit from either country.
And to protect American workers and businesses involved in international trade and commerce from double taxation and thus enhance trade with foreign nations.
The United States has had a totalization agreement with Canada, our largest trading partner, since 1984. As you know, Mexico -- our other NAFTA partner -- and Japan are our second and third largest trading partners.
Totalization Agreement with Japan:
SSA has been discussing the possibility of a totalization agreement with Japan for many years. Talks bogged down because Japan insisted that U.S. workers temporarily living in Japan pay into the Japanese national health insurance system (currently a tax equal to 8.5 percent of payroll and expected to more than double in the coming years). Negotiations with the Japanese Government were successfully concluded on August 1 of this year. I am happy to report that the United States obtained important concessions from the Japanese Government on a number of issues including an exemption for U.S. workers and their employers from paying into Japan's health insurance system. Following an internal legal review, I expect to transmit the draft agreement to the State Department by the end of this calendar year and would expect that it would be implemented sometime early in calendar year 2005.
Totalization Agreement with Mexico:
SSA has had informal discussions with Mexico over the last two years regarding a potential totalization agreement. Last year, I asked Deputy Commissioner Martin Gerry to visit Mexico with a team of senior SSA officials in order to determine whether Mexico was prepared to administer a totalization agreement.
The team met with counterparts in the Mexican government; was briefed extensively on Mexican social security operations, data collection and storage systems; and visited Mexican social security field offices. Based on this visit and on follow-up discussions, the team concluded that Mexico was prepared to administer a totalization agreement, including the ability to provide the records necessary for SSA to determine the eligibility of individuals to totalized benefits.
The Process After an Agreement is Negotiated:
After a totalization agreement is negotiated, the first step is for SSA’s General Counsel to review the draft agreement to ensure that it is fully consistent with American law. Second, the State Department reviews the draft agreement in terms of its consistency with overall American interests. If the draft is cleared by the State Department, and the White House, the agreement is then formally signed by representatives of the two governments.
The Secretary of State then transmits the signed agreement to the President who, in turn, transmits it to the Congress where it sits in review for 60 session days. Once the Congressional review is completed and the partner country has completed all of its necessary clearances, notes are exchanged between the two governments indicating their readiness to implement the agreement.
Typically, the agreement calls for it to take effect about 3 to 4 months following the exchange of notes; in practice most agreements have become effective about 12 months following submission to Congress. Congress has never voted to disapprove a totalization agreement.
Cost of These Agreements:
SSA’s independent actuaries have produced estimates for each of these potential agreements based on assumptions of how each might look when drafted, including estimates of the number of individuals affected by each agreement and its cost impact on Social Security trust funds. Based on the actuary’s estimates, over the first 5 years, U.S. workers and their employers would be relieved from paying $134 million in taxes to Mexico and $634 million in taxes to Japan. United States workers and their dependents would be paid additional benefits because of the agreement in the amount of $29 million from Mexico and $130 million from Japan.
The cost impact on Social Security trust funds would be negligible over a 75-year period in both cases. Expressing the cost in this manner -"over a 75 year period" - is consistent with the manner in which the actuarial condition of the Social Security program is presented in the reports of the Social Security Trust Funds.
As I mentioned, the cost to the Social Security trust funds of a totalization agreement with Mexico would be $78 million in its first year rising to $138 million in its 5th year, an amount significantly lower than the current annual cost of our agreement with Canada (about $200 million).
The costs of a totalization agreement with Japan are estimated to rise from $82 million in year one to $130 million in its 5th year—very similar to those estimated for Mexico.
Conclusion
I want to thank the Subcommittee for inviting me here today. I welcome the opportunity to clear up some of the misinformation that has been circulating about how totalization agreements work as well as the cost impact of totalization agreements.
I would be happy to answer any questions you may have.
"That's a total lie!
I quit paying into SS in 1978 after paying maximum for 26 years and started collecting SS when I was 65. The amount that I receive is less than some people get but still quite substantial, $1,163/mo.."
Not quite right.
There are different requirements to get disability verses retirement. For diability a person has to work a certain amount in the 10 years prior to his disability onset (also known as 40 quarters). See post #103 for a better explaination on the disability requirements.
For retirement, your recent earnings do not matter. You are required to have 40 quarters over your entire lifetime. Period. If you have the quarters, then you generally have the retirment benefits. The way SSA comes up with your benefit amount is by taking the highest 35 years of earnings, adjusting for inflation, and applying a formula.
Here is a link to the formula.
http://www.socialsecurity.gov/pubs/10070.html
Ok, I looked it anyways because I can't sleep.
On March 2, 2004, President Bush signed into law H.R. 743, the Social Security Protection Act of 2004 (Public Law 108-203).
The following descriptions of provisions in the bill are identical to the descriptions in Legislative Bulletin 108-17.
(snip)
Prohibit Benefits to Persons Not Authorized to Work in the
United States
Would provide that the payment of Title II benefits based on the earnings of any noncitizen would be precluded unless (1) the noncitizen had ever been issued an SSN indicating authorization to work in the United States, or (2) the noncitizen, at the time any quarters of coverage are earned, was admitted to the United States under a B1 visa (for business purposes) or D visa (crew member--e.g., for an airline).
Would be effective with respect to Social Security numbers issued on or after January 1, 2004.
http://www.ssa.gov/legislation/legis_bulletin_030404.html
You are absolutly correct!
That's why I am so enthused about these Personal Retirement Accounts Dubyuh's gonna introduce in his second term. For folks who still have a big part of their working lives ahead of them, we will be able to set aside a portion of our FICA to create Personal Retirement Trust Funds. As this becomes popular and the "portion of FICA" increases in the upcoming years, I would hope we will have the option of opting out of the present Social Security system altogether!! To tell you the truth, I really doubt a 41-year-old like myself will ever see a penny of my Social Security anyway...at least I sure ain't counting on it!!
FReegards...OpieMUD
Yeah, but I hear you can git rental property down there fer dirt cheap!! We can live like Kings down there with our minimum wage jobs.
FReegards...MUD
If they give SS benefits to illegals after 6 quarters then I want a minimum of 20 times the benefits that ANY illegal gets. I've been working 120 quarters and won't see SS benefits for another 80 quarters.
Makes sense, but the Mexican workers would shudder at the American company giving money directly to the IMSS (Mexican Institute of Social Security) because they'll probably never see it.
Kind of like all the payments made through the bracero program to Wells Fargo bank. The bank forwarded the funds to the Mexican government, and now the elderly "beneficiaries" of that program living in Mexico (and some in the US) are wondering where their benefits are. The government says it doesn't know where the money is, but Wells Fargo clearly sent the payment.
absolutely, that premise only works if our average retiree has a 7th grade education and the wage level to go along with it.
I'm sure there will be negotiations between the Mexican government and the Bush administration to reduce it to a misdemeanor for Mexicans
Vicente even got Jorge to put a Mexican flag on his website - see:
http://www.georgewbush.com/Espanol/
If it's stolen - the credits should go to the legitimate card holder. If the card is rented, the holder should price it into his rent:
Card without benefits: $100 a year
card with benefits: $150 a year
our something like that (actual prices may vary)
the government should stay out of it, and leave it up to the renter to collect based on the agreement he made
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