Yet Mexican Social Security System Nearly Bankrupt...
Just three years after the U.S. signed a Social Security Totalization Agreement with Mexico, the Mexican Social Security system is nearly bankrupt. A leading Latin American news service reports that the Mexican system is in “serious trouble,” having only funds for three more years. TSCL is highly concerned that the Mexican government may soon step up pressure on the Bush Administration to approve the pending Social Security Totalization Agreement.
The impending bankruptcy of the Mexican Social Security system has huge implications for U.S. Social Security beneficiaries should President Bush sign the agreement and send it to Congress. The U.S. has never before entered into a Totalization Agreement in which the other nation’s Social Security system is so close to bankruptcy. By rights, this should raise questions among our elected lawmakers as to whether U.S. workers in Mexico would receive equitable treatment.
Totalization Agreements are normally made between the United States and other nations having economies similar to our own. When a worker in the U.S. goes to Canada and works, for example, he or she can earn credit for Canadian Social Security benefits, just as a Canadian worker can earn credit for U.S. Social Security benefits. Should the President approve the Totalization Agreement with Mexico and send it to Congress, it suggests that Mexicans, including those that worked here illegally, would benefit while U.S. retired workers would not, because the Mexican system is insolvent. Due to a loop hole in Social Security law, hundreds of thousands of Mexicans who worked here illegally could claim more than a $110,000 billion in benefits based on illegal work by 2040, according to an estimate by Advisor editor Mary Johnson. TSCL believes it would be clearly wrong to allow this agreement to take effect, and is meeting with Members of Congress to pass a resolution to stop it.
Source: “Mexican Social Security In Deep Financial Troubles,” Prensa Latina, August 8, 2007. “Cost of Totalization With Mexico,” Mary Johnson, TSCL, April 24, 2007.