Like the enormous sword of Greek legend hanging by a single hair above the head of Damocles, the U.S. Totalization agreement with Mexico continues to remain hanging over our nation’s Social Security program. The agreement has not yet undergone final approval, but its fate has far-reaching implications for the benefits of 53 million U.S. Social Security beneficiaries.
Last year, the Social Security Trust Fund fell into deficit, paying out more than received in revenues for the first time since 1983. The new incoming Congress will undoubtedly consider long-term proposals that would cut Social Security benefits. But at the same time, Totalization with Mexico would add potentially millions of new beneficiaries to the rolls — beneficiaries whose checks are based, at least in part, on illegal work.
Incredibly, according to a legal opinion obtained by TSCL in 2009, Totalization with Mexico may give Mexican immigrants greater rights to U.S. Social Security benefits than U.S. senior citizens currently enjoy. The proposed U.S./Mexico Totalization Agreement would be based on a contractual promise made by the United States government for the benefit of individual Mexican workers who qualify for U.S. Social Security benefits under the terms of that agreement.
In contrast, the Social Security benefits of American workers, are not guaranteed by law. In the Supreme Court decision, Fleming vs. Nestor, the court found that Congress can make adjustments when conditions of the Social Security systems demand and that American workers who have paid their employment taxes have no legal recourse to any of the money deposited in the Social Security Trust Fund.
Totalization agreements allow workers who divide their careers between two countries to combine earnings credits under both systems in order to qualify for benefits. The U.S. currently has 24 such agreements, most with nations having economies similar to our own. What makes the agreement with Mexico so controversial are the millions of Mexicans working in this country without legal authorization.
A 2004 law forbids the payment of Social Security benefits to illegal immigrants in the U.S. unless they receive legal work authorization at some point. The scope of that law appears much more vague under Totalization. It appears that illegal Mexican workers would only need to return to Mexico to file a claim for benefits. Under current policy, once a worker becomes eligible for Social Security, the U.S. Social Security Administration determines entitlement based on all earnings, even from jobs worked illegally.
TSCL continues to fight the agreement and supports measures that would block it from taking effect should it be sent to Congress for approval. TSCL continues to educate new lawmakers about the issue and recently filed a third Freedom of Information Act lawsuit to force the U.S. government to release documents related to the agreement, include those concerning the estimated cost to the Social Security Trust Fund.
Sources: Social Security Benefits for Noncitizens: Congressional Research Service, July 20, 2006, RL32004.