Illegal but Paid?

‘U.S. Social Security May Reach Mexico,” blared a Washington Post headline last month: A U.S.-Mexico agreement would send hundreds of millions of dollars in Social Security benefits annually to roughly 37,000 Mexican workers. But this and other news reports actually dramatically underestimated the true scope of the accord. If top officials at the State Department and the Social Security Administration have their way, up to $345 billion could be siphoned from the Social Security “trust fund” over the next two decades—mostly to people who worked in the U.S. illegally.

The media reports quoted a relatively low cost because the Mexico pact is supposedly modeled after deals the U.S. already has with 20 other countries, mostly in Europe, known as Totalization Agreements. “Totalization” is government-speak for combining the taxes paid into America’s and a foreign country’s respective social-security systems—thus allowing people who split their careers between two countries to get a harmonized retirement benefit from the two governments. But the Mexico accord is different in one key respect: It makes illegals from Mexico eligible for Social Security benefits, which will make the cost skyrocket.

JM

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Joel Mowbray

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‘U.S. Social Security May Reach Mexico,” blared a Washington Post headline last month: A U.S.-Mexico agreement would send hundreds of millions of dollars in Social Security benefits annually to roughly 37,000 Mexican workers. But this and other news reports actually dramatically underestimated the true scope of the accord. If top officials at the State Department and the Social Security Administration have their way, up to $345 billion could be siphoned from the Social Security “trust fund” over the next two decades—mostly to people who worked in the U.S. illegally.

The media reports quoted a relatively low cost because the Mexico pact is supposedly modeled after deals the U.S. already has with 20 other countries, mostly in Europe, known as Totalization Agreements. “Totalization” is government-speak for combining the taxes paid into America’s and a foreign country’s respective social-security systems—thus allowing people who split their careers between two countries to get a harmonized retirement benefit from the two governments. But the Mexico accord is different in one key respect: It makes illegals from Mexico eligible for Social Security benefits, which will make the cost skyrocket.