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Socsecurity to mexico { December 19 2002 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A9342-2002Dec18.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A9342-2002Dec18.html
U.S. Social Security May Reach To Mexico
By Jonathan Weisman
Washington Post Staff Writer
Thursday, December 19, 2002; Page A01
Pushed by the Mexican government, the Bush administration is working on a Social Security accord that would put tens of thousands of Mexicans onto the Social Security roster and send hundreds of millions of dollars in benefits south of the border.
White House and Mexican government officials say discussions on an agreement to align the Social Security systems of the two countries are informal and preliminary. But excerpts from an internal Social Security Administration memo obtained this month say the agreement "is expected to move forward at an accelerated pace," with the support of both governments, and could be in force by next October.
The pact would be the latest, but by far the largest, of a series of treaties designed to ensure that people from one country working in another aren't taxed by both nations' social security systems. In its first year, the agreement is projected to trigger 37,000 new claims from Mexicans who worked in the United States legally and paid Social Security taxes but have been unable to claim their checks, according to a memo prepared by Ted Girdner, the Social Security Administration's assistant associate commissioner for international operations.
Extrapolating from U.S. and Mexican government statistics, the accord could cost $720 million a year within five years of implementation. One independent estimate put the total at $1 billion a year -- a large sum, but a trifle compared with the $372 billion in Social Security benefits currently being paid to 46.4 million recipients.
Mexican President Vicente Fox has been pushing President Bush to sign a Social Security agreement with Mexico as something of a consolation prize to make up for Bush's failure to pursue promised immigration reforms, according to Latino lobbyists close to the Fox administration. Mexican officials began pressing the White House hard at meetings that preceded the Asia-Pacific Economic Cooperation forum in Los Cabos, Mexico, in October.
"When the legalization talks began going nowhere, the Mexicans began focusing on this," said Maria Blanco, national senior counsel for the Mexican American Legal Defense and Educational Fund. "They really bore in at Los Cabos."
Arturo Sarukhan, a top official in Mexico's foreign ministry, said that after Mexico's failure to win a comprehensive package of immigration reforms from Bush, it is lobbying in Washington for important incremental steps. "How do you eat an elephant? One bite at a time," he said.
The Social Security agreement, he said, is one of those less-sexy things that Mexico has been pushing to deepen its relationship with the United States and improve the day-to-day lives of Mexicans.
Just yesterday, Fox underscored the political pressure he is under domestically to secure concessions from the United States when he journeyed to the border city of Nuevo Laredo to call for an "urgent" immigration accord to end discrimination against Mexican workers north of the border.
Concern is rising on Capitol Hill -- and even among some White House economic aides -- that any agreement on Social Security could add a new burden to the benefits system, just as the baby-boom generation is preparing to retire. House Ways and Means Committee staff members are meeting today with Social Security officials to hash out projected costs for such an agreement.
"We are concerned about the sheer magnitude of the agreement," said a House Republican aide who is an expert on Social Security. About 94,000 beneficiaries living abroad have been brought into the system by the 20 existing international agreements. A Mexican agreement alone could bring in 162,000 in the first five years.
White House spokeswoman Claire Buchan said the issue is being explored only at a "technical level" at this point, and the administration has not yet decided to move forward with formal negotiations. "A totalization agreement with Mexico would have significant implications," she said.
Miguel Monterrubio, a spokesman for the Mexican Embassy, said several meetings have taken place between the Social Security Administration and its Mexican counterpart since November 2001, but he, too, called them informal.
The Social Security memo indicates that work may be further along than both governments are saying. According to the memo, "the application workloads generated by an agreement with Mexico will be much larger than those resulting from any of the 20 existing agreements" with other countries.
In addition to the flurry of new claims, an additional 13,000 Mexicans entitled to benefits but cut off by provisions in recent immigration laws could also begin receiving their checks. In a 1996 immigration reform law, Congress decreed that foreigners not legally residing in the United States could no longer claim benefits, unless their home countries were subject to a treaty. Those beneficiaries alone were owed nearly $50 million in 1998, according to a Mexican government document.
The team of negotiators from the Social Security Administration and State Department working on the agreement already anticipate that the U.S. government will have to erect a new building in the embassy complex in Mexico City just to deal with the crush, according to a source familiar with the negotiations.
If the new beneficiaries in Mexico received payments roughly equal to the average $8,100 benefit that Mexican-born retirees in the United States now receive, the total would easily surpass $1 billion a year, said Steven A. Camarota, director of research at the Center for Immigration Studies, a nonpartisan research organization. And even that number could seriously underestimate the number of Mexicans who would seek Social Security benefits, if not qualify for them, he said.
Such talk has caused growing concern at the State Department and on Capitol Hill. A memo from the State Department's assistant secretary for consular affairs, Maura Harty, to Secretary of State Colin L. Powell even indicated the White House National Economic Council has raised objections. As one State Department official put it, "the staffing and budget implications haven't been fully worked out, but we're thinking about it."
To the Mexican government and immigrant advocates, such concerns are beside the point.
"How can [the U.S. government] say this is too costly?" Blanco asked. "This is money these workers paid into the Social Security system. This is their money."
The United States has been negotiating Social Security "totalization" agreements with other governments since the late 1970s. They allow workers to "totalize" the number of years they have worked in both countries to meet the minimum years required to qualify for benefits in one of the systems.
Until now, the cost of such agreements has been relatively small, since they have been almost exclusively with European countries. According to the Social Security Administration, the annual cost of all 20 existing accords equals about $183 million.
"All of the deals before this have been noncontroversial and low-cost," said a House Republican expert on Social Security. "This could be dramatically different in all kinds of ways."
The GOP aide said Mexican officials would also like benefits to be adjusted upward for a legal Mexican worker who worked in the United States for some time illegally and paid into the Social Security system using a false Social Security number. Gabriela Lemus, director of policy and legislation for the League of United Latin American Citizens, said as much as $21 billion in Social Security payments have not been tracked to potential beneficiaries, most likely because they were paid under a false Social Security number.
Correspondent Kevin Sullivan in Mexico City contributed to this report.
© 2002 The Washington Post Company
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