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Montana Viewpoint©

WILL SOCIAL SECURITY GO SOUTH ON US?

March 2, 2009

One of the attributes of the internet is that it can spread inaccurate information faster than my old Aunt Gert who listened in on the party line with a passion. Of course, one of the major differences between the internet and Aunt Gert is that her misinformation didn’t influence national policy. Ruin marriages and bankrupt reputations, yes; but national policy was safe from her gossip.

Recently folks over retirement age have been getting letters from a couple of senior citizen organizations asking them to send an “emergency contribution” to prevent Mexico from getting “all of our social security money.” This concern—some call it panic—is about a “Social Security Totalization Agreement” with Mexico that was negotiated in 2004, but has not yet been sent to Congress for approval.

The United States has social security totalization agreements in place with twenty one countries. A totalization agreement is a reciprocity agreement allowing a citizen of one country to collect social security benefits from another country where that person has worked and paid taxes to its social security system. This is apparently not uncommon because of the nature of employment with multinational corporations. The amount of time worked in the foreign country also counts toward the time requirements needed for eligibility in the person’s home country.

These agreements were pretty low on the public concern scale until the one with Mexico was negotiated. To say that it is controversial is a fact, but it’s not a left-right political controversy—it’s more of a right-right scenario because there are conservative organizations that support it and those that oppose it. The Eagle Forum is dead set against it, but the libertarian Cato Institute and the conservative Heritage Foundation are in favor of it. Go figure.

The agreement with Mexico was negotiated in 2004 during the G. W. Bush administration and signed by the administrators of the American and Mexican social insurance programs. Once signed, these agreements have to be approved by Congress; but this one hasn’t made it that far. Five years have passed but the U. S.-Mexico Totalization Agreement hasn’t.

The drive to stop the U S Mexican agreement has been spearheaded by the The Retired Enlisted Association (TREA) which, according to their website, is an organization of U. S. military retirees, Reserves, National Guard, and active duty personnel. For some reason—and not a good one, whatever it was—the Social Security Administration (SSA) would not make the agreement public, and TREA filed and won a Freedom of Information Act lawsuit to get a copy of it. SSA claims that the cost to the U. S. is negligible and that American retirees who have worked in Mexico will benefit from it as have American retirees who are now receiving benefits from other countries. The Government Accountability Office (GAO), which is the non-partisan investigative arm of Congress, says that there may be more potential for economic harm than the SSA sees. The SSA denies it.

At issue, according to the GAO, is that the SSA did not thoroughly investigate the workings of the Mexican social security system, nor did they take into account the potential that millions of undocumented workers who paid into the U. S. Social security system may become eligible for benefits from the United States if undocumented aliens are granted amnesty. The fact remains, though, that the Social Security Administration hasn’t willingly laid its cards on the table or, according to the GAO, done a very sharp job of negotiating. That, however, does not give leave for the opponents to claim Mexico will get ALL the money. The American Association of Retired People does not seem to be making any fuss about it at all.

So the SSA says it will cost a negligible amount; the GAO says it could be many millions more; the opponents of the agreement are telling its membership that the entire Social Security Trust Fund is moving South; and Michael Tanner of the Cato Institute says, “… the only reason why this is an issue is that it's an agreement with Mexico. If this were the U.S.-Ruritania Totalization Agreement, we wouldn't hear a thing.” [“Going Totally Berserk Over Totalization,” printed in the Examiner, January 2007]

And I say it’s confusing.

Montana Viewpoint© is carried by 20 Montana weekly newspapers, including those in Helena and Billings, with a combined circulation of over 60,000.

Jim Elliott is a former state senator from Trout Creek. He served in the Montana House 1989 to 1996 and the Montana Senate from 2001 to 2008. Elliott has distributed his opinion column statewide since 1992. There is no charge for publication.