No Social Security for Illegal Aliens(Time to go home!)

The U.S.-Mexico Social Security Totalization Agreement currently being drafted by the Social Security Administration is not far from implementation. After the current agreement is finalized, approved by the State Department, and signed by the President, Congress will have 60 days to pass a resolution of disapproval of the agreement. If Congress does not disapprove, it will automatically go into effect. Though the stated aim of the totalization agreement is to coordinate the Social Security programs of both countries to our mutual benefit, the actual advantages clearly lie in Mexico's favor.

Though there are no official statistics on how many Americans work and pay taxes in Mexico, there are most definitely far, far fewer than the 9.2 million Mexicans working in the U.S., approximately 69% of whom are illegal aliens. Though the Social Security Administration has asserted that the benefits accruing from this totalization agreement will only be available to those who have worked legally in the U.S., the Social Security Protection Act of 2004 they cite in support only applies from 2004 forward. In addition, this legislation would not apply to those who are working here now illegally but later gain legal status, as the new Democratic Congress and President Bush would like to see.

If the totalization agreement is allowed to go into effect through congressional inaction, the Social Security Administration says that 50,000 additional Mexicans would qualify for Social Security benefits in the first five years at a total estimated cost of $525 million. This number would not include family members waived in or the millions of illegal immigrants who may be granted amnesty. In that same time period, they stated that the agreement would only save U.S. workers and their employers $140 million, or an average of $28 million a year. Our existing 20 totalization agreements average savings of, per country, $40 million a year. Not only are the costs of this agreement almost four times the savings, it saves us $10 million less than the average agreement.

It only takes simple math to see the glaring disparities in this cost-benefit analysis, and it provides a startling parallel between the overall economic disparity between the U.S. and Mexico that encourages Mexicans to illegally migrate north in exponentially increasing numbers every year. Providing the incentive of Social Security benefits would not only grant far greater benefits to Mexico than to the U.S., it would provide further incentives for illegal immigration. As recently as 2002, a study by the Center for Immigration Studies reported that illegal alien households may have paid $16 billion in taxes, but they imposed more than $26.3 billion in costs on the federal government; there is no indication this trend will reverse itself, even if amnesty is granted.

This totalization agreement would impose considerable additional costs on a U.S. Social Security system already over-burdened and scheduled for insolvency by 2040, and it would encourage further illegal immigration by low-skilled Mexicans who consume more in entitlements than they pay in taxes. Perhaps the virtues of this agreement lie in other areas? In the U.S., it only takes 10 years worth of work to fully vest in the Social Security program, and partial benefits may be granted to those who have worked here as little as 18 months. In Mexico, it takes 24 years to achieve fully vested benefits, and totalization does nothing to address this inconsistency. No benefits there either.

Though Congress has never before voted to disapprove of a totalization agreement, this agreement with Mexico represents a drastic departure from comparable programs with other countries: it affects a far greater number of people, it involves more significant costs while conferring fewer benefits, and it provides incentives for further illegal immigration—a problem unique to our neighbor to the south. If the President signs this agreement and sends it to Congress to review, I hope that my colleagues will put serious thought to where the benefits of this agreement lie, and I think they will find that the answer is not in the United States.

Some Immigrants Are Offering Social Security Numbers for Rent
New York Times 6/7/2005 | EDUARDO PORTER
Posted on 06/06/2005 11:57:25 PM EDT by nj26

Gerardo Luviano is looking for somebody to rent his Social Security number. Mr. Luviano, 39, obtained legal residence in the United States almost 20 years ago. But these days, back in Mexico, teaching beekeeping at the local high school in this hot, dusty town in the southwestern part of the country, Mr. Luviano is not using his Social Security number. So he is looking for an illegal immigrant in the United States to use it for him - providing a little cash along the way. "I've almost managed to contact somebody to lend my number to," Mr. Luviano said. "My brother in California has a friend who has crops and has people that need one."

Mr. Luviano's pending transaction is merely a blip in a shadowy yet vibrant underground market. Virtually undetected by American authorities, operating below the radar in immigrant communities from coast to coast, a secondary trade in identities has emerged straddling both sides of the Mexico-United States border. The number of people participating in the illegal deals is impossible to determine accurately. But it is clearly significant, flourishing despite efforts to combat identity fraud.

"There are people who live in Mexico who take $4,000 or $5,000 in unemployment in the off season," said Jorge Eguiluz, a labor contractor working in the fields around Stockton, Calif. "They just lend the number during the season." The deals also generate cash in other ways.

Most identity lending happens within an extended family, or among immigrants from the same hometown. But it is still a hard-nosed transaction. Illegal immigrant workers usually earn so little they are owed an income tax refund at the end of the year. The illegal immigrant "working the number" will usually pay the real owner by sharing the tax refund.

Since legal American residents can lose their green cards if they stay outside the country too long, for those who have returned to Mexico it is useful to have somebody working under their identity north of the border. "There are people who live in Mexico who take $4,000 or $5,000 in unemployment in the off season," said Jorge Eguiluz, a labor contractor working in the fields around Stockton, Calif. "They just lend the number during the season."

The deals also generate cash in other ways. Most identity lending happens within an extended family, or among immigrants from the same hometown. But it is still a hard-nosed transaction. Illegal immigrant workers usually earn so little they are owed an income tax refund at the end of the year. The illegal immigrant "working the number" will usually pay the real owner by sharing the tax refund. "Sometimes the one who is working doesn't mind giving all the refund, he just wants to work," said Fernando Rosales, who runs a shop preparing income taxes in the immigrant-rich enclave of Huntington Park, Calif. "But others don't, and sometimes they fight over it. We see that all the time. It's the talk of the place during income tax time."

The income tax "refund" is almost certainly generated by Earned Income Tax Credit (EITC) fraud, which as a "legal resident" the number renter would qualify to receive, especially if they have have or claim children. The EITC is a "refundable tax credit, which means the IRS will pay it out even if no taxes have been withheld or paid in. So the IRS gives filers who claim the EITC "refunds," even if they have had no taxes withheld. These number renters can claim up to $4,400 for the 2005 tax year in EITC "refunds," most of the number renters probably claim this maximum refund.

The Additional Child Tax Credit is another "refundable" credit which is no doubt routinely claimed by these renters.For 2005, if the number renter claimed $14,400 in wage income, and three children, between the EITC and the Additional Child Tax Credit the renter would, without having any taxes withheld from wages, receive a tax "refund" of $4,898, plus have $892 credited to Social Security; in addition to the potential of thousands of dollars in California unemployment compensation.

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Another widely-used SSN scheme: the illegals name their anchor baby the same name as the parent. They obtain a valid SSN for the anchor baby; the parent uses it, no one checks beyond name-matching, if that.

More---Lou Dobbs mentioned that the illegals are stealing small childrens' SSN because a child doesn't use a number very often so it is near impossible to detect a stolen number.

Dobbs also mentioned that business owners give illegals SSN of a previous employee (it is not a felony to give away SSNs but it is a felony to use them).

Another twist. Now they don't have to use rented or fake SS# because they've just been granted the right to collect SS if they have worked a short time (44 monthes I think), whereas we the American citizen has to work for far longer before collecting.

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