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Results 1 to 2 of 2

Thread: When does it END

  1. #1
    Guest
    http://www.insightmag.com/news/382831.html
    Social Security Crisis Will Worsen if Mexicans Cash In

    Posted March 10, 2003


    By James R. Edwards Jr.
    If you thought a Social Security crisis was looming already, you should know it could get a lot worse quickly, if the Bush administration cuts a sweetheart deal with Mexico.

    State Department and Social Security Administration officials are working quietly on a plan that rewards Mexican lawbreakers for their lawlessness. Millions of both legal and illegal aliens from Mexico could start collecting Social Security benefits.

    The pending deal differs from similar agreements. So-called totalization agreements have been around since the 1970s. They allow foreigners who worked legally in the United States and paid Social Security taxes to collect benefits.

    Almost all of the 20 existing agreements are with European nations. The cost to U.S. taypayers is a total of $183 million for 94,000 beneficiaries, according to the Social Security Administration. By contrast, the Mexican deal could cost, according to National Review's Joel Mowbray, $345 billion during the next 20 years. That's billion with a "B.''

    Take the fact that about half of the 8 million to 11 million illegal aliens in the United States are from Mexico. Take the fact that since 1990 about $300 billion has been paid from the earnings of illegal aliens using fake Social Security numbers. Add the fact that Social Security pays on a "progressive" scale, meaning low-income payers receive a heck of a lot more money in benefits than they paid in, and that Mexican illegals by and large are unskilled.

    Such a totalization agreement with Mexico promises to become a money pit for Americans, arising from the sheer volume of people involved, Mexicans' high proportion in the illegal-alien population and their vast reliance on fraud, such as fraudulent Social Security numbers and other identity fraud.

    This agreement uniquely "provides a foreign government Social Security money even for those of its citizens who have worked illegally in America," immigration lawyer Matt Hayes writes on FOXNews.com. He further points out that the Mexico deal "will dismantle the chief provision of the 1996 Welfare Reform Act, a law which has saved U.S. taxpayers $72 billion since its inception, because it will give Social Security payments to illegal aliens and legal aliens who have not paid into our payroll tax system for the requisite 10 years."

    Ironically, the Bush administration already has warned of the impending cash crunch that Social Security faces. That's the impetus behind allowing people to save a portion of their Social Security payments in a personal-investment account.

    The Social Security program will go bankrupt in 2038, so policymakers have been looking for a way to salvage it financially. But "bankrupt" doesn't really capture the problem.

    In the first place, the Social Security "trust fund" is an accounting gimmick. It represents no real, separate account of money. Under the "pay-as-you-go" system, the portion of revenue that's attributed to Social Security on the books will start falling behind benefit payments in 2016. The accounting ruse will show the trust fund as empty in 2038, with baby boomers then all retired.

    "Pay as you go" means that wage earners currently in the workforce pay Social Security taxes that pass through the Treasury doors, are accounted and sent right out to current beneficiaries. At present, the income and payroll taxes of 3.3 workers fund the Social Security benefits of each retiree. By 2030, the worker-to-beneficiary ratio will be 2-to-1. By 2075, there are expected to be 1.85 workers per Social Security pensioner.

    That means the bottom line, when boomers' retirement years roll around, is that Social Security will bleed red ink, bumping directly against the rest of federal expenditures demanding cash. With Mexico on the Social Security redistribution-of-wealth dole, this sweetheart deal would be sweet only for Mexico and awfully sour for Americans, both retirees and taxpayers. So guess who will laugh all the way to the bank?

    Our politicians should remember that senior citizens vote more faithfully than any other demographic group and that the 65-and-older crowd is growing. Politically, this scheme risks Social Security's financial stability for the sake of placating Mexico and pandering to Latino special-interest activists. It pokes a finger in the eye of American senior citizens.

    If policymakers really want to save Social Security, first do no harm. The Mexico deal would do nothing but harm -- not just to the program, but to hardworking Americans.

    James R. Edwards Jr., coauthor of The Congressional Politics of Immigration Reform, is an adjunct fellow with the Hudson InstituteSocial Security Crisis Will Worsen if Mexicans Cash In

  2. #2
    Guest
    http://www.insightmag.com/news/382831.html
    Social Security Crisis Will Worsen if Mexicans Cash In

    Posted March 10, 2003


    By James R. Edwards Jr.
    If you thought a Social Security crisis was looming already, you should know it could get a lot worse quickly, if the Bush administration cuts a sweetheart deal with Mexico.

    State Department and Social Security Administration officials are working quietly on a plan that rewards Mexican lawbreakers for their lawlessness. Millions of both legal and illegal aliens from Mexico could start collecting Social Security benefits.

    The pending deal differs from similar agreements. So-called totalization agreements have been around since the 1970s. They allow foreigners who worked legally in the United States and paid Social Security taxes to collect benefits.

    Almost all of the 20 existing agreements are with European nations. The cost to U.S. taypayers is a total of $183 million for 94,000 beneficiaries, according to the Social Security Administration. By contrast, the Mexican deal could cost, according to National Review's Joel Mowbray, $345 billion during the next 20 years. That's billion with a "B.''

    Take the fact that about half of the 8 million to 11 million illegal aliens in the United States are from Mexico. Take the fact that since 1990 about $300 billion has been paid from the earnings of illegal aliens using fake Social Security numbers. Add the fact that Social Security pays on a "progressive" scale, meaning low-income payers receive a heck of a lot more money in benefits than they paid in, and that Mexican illegals by and large are unskilled.

    Such a totalization agreement with Mexico promises to become a money pit for Americans, arising from the sheer volume of people involved, Mexicans' high proportion in the illegal-alien population and their vast reliance on fraud, such as fraudulent Social Security numbers and other identity fraud.

    This agreement uniquely "provides a foreign government Social Security money even for those of its citizens who have worked illegally in America," immigration lawyer Matt Hayes writes on FOXNews.com. He further points out that the Mexico deal "will dismantle the chief provision of the 1996 Welfare Reform Act, a law which has saved U.S. taxpayers $72 billion since its inception, because it will give Social Security payments to illegal aliens and legal aliens who have not paid into our payroll tax system for the requisite 10 years."

    Ironically, the Bush administration already has warned of the impending cash crunch that Social Security faces. That's the impetus behind allowing people to save a portion of their Social Security payments in a personal-investment account.

    The Social Security program will go bankrupt in 2038, so policymakers have been looking for a way to salvage it financially. But "bankrupt" doesn't really capture the problem.

    In the first place, the Social Security "trust fund" is an accounting gimmick. It represents no real, separate account of money. Under the "pay-as-you-go" system, the portion of revenue that's attributed to Social Security on the books will start falling behind benefit payments in 2016. The accounting ruse will show the trust fund as empty in 2038, with baby boomers then all retired.

    "Pay as you go" means that wage earners currently in the workforce pay Social Security taxes that pass through the Treasury doors, are accounted and sent right out to current beneficiaries. At present, the income and payroll taxes of 3.3 workers fund the Social Security benefits of each retiree. By 2030, the worker-to-beneficiary ratio will be 2-to-1. By 2075, there are expected to be 1.85 workers per Social Security pensioner.

    That means the bottom line, when boomers' retirement years roll around, is that Social Security will bleed red ink, bumping directly against the rest of federal expenditures demanding cash. With Mexico on the Social Security redistribution-of-wealth dole, this sweetheart deal would be sweet only for Mexico and awfully sour for Americans, both retirees and taxpayers. So guess who will laugh all the way to the bank?

    Our politicians should remember that senior citizens vote more faithfully than any other demographic group and that the 65-and-older crowd is growing. Politically, this scheme risks Social Security's financial stability for the sake of placating Mexico and pandering to Latino special-interest activists. It pokes a finger in the eye of American senior citizens.

    If policymakers really want to save Social Security, first do no harm. The Mexico deal would do nothing but harm -- not just to the program, but to hardworking Americans.

    James R. Edwards Jr., coauthor of The Congressional Politics of Immigration Reform, is an adjunct fellow with the Hudson InstituteSocial Security Crisis Will Worsen if Mexicans Cash In

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