More and more immigrants apparently are receiving credit for Social Security based on unauthorized work while illegal. Incredible as it may sound, a new report from the General Accountability Office (GAO) says that the Social Security Administration (SSA) is holding on file some 8.9 million earnings reports with the Social Security number of “000-00-000.”
In order for a person to legally work in the United States, he or she must have a valid Social Security number. Under prevailing policies however, immigrant workers can and often do start a job without one. Despite the existence of penalties for knowingly employing illegal workers, according to the GAO, government enforcement efforts have been limited in recent years. Employers are responsible only for advising workers they are required to apply for a Social Security number. When an employer submits an earnings report for a tax year before a worker obtains a valid SSN it is a “potential indicator of unauthorized employment,” the GAO confirms.
According to the GAO, when the earnings reports submitted by employers do not match SSA’s records, they are retained in an “Earnings Suspense File” (ESF). In 2002 alone SSA was unable to correctly match almost 9 million such reports representing $56 billion in earnings.
SSA eventually reinstates, or matches to a worker’s record, a substantial number of these reports, and in recent years a growing number of them have been for foreign-born workers. According the GAO, in 2003 almost half of the foreign-born workers had earnings prior to receiving a valid Social Security number. Current Social Security law does not bar the reinstatement of earnings for unauthorized work while in this country illegally.
In March 2003, Social Security’s Inspector General, James G. Huse, Jr. said in a Congressional response report that if Mexican noncitizens are working in the United States illegally and an amnesty and/or totalization agreement occurs, SSA potentially may need to reinstate a large volume of wages from the ESF based on ealier unauthorized work. Nevertheless last year the Social Security Administration and the Mexican government signed a totalization agreement. The president is expected to finalize the agreement soon.
The United States has 20 such agreements with other countries, but those countries have economies similar to ours. The pacts are intended to ensure that workers who spend part of their careers working in another country are not subjected to double taxation, and they allow workers to total the amount of time worked in both countries in order to qualify for Social Security benefits.
TSCL opposes this agreement with Mexico, viewing it as rewarding people who have broken our laws at the expense of those who legally worked and paid into the system. Currently the public is being told Social Security system is not sustainable as it is and that benefits must be cut. Some of the proposals to reform Social Security include cuts to Cost-Of-Living Adjustments which means cuts to the benefits of current retirees, as well as cuts to the benefits of future retirees.
TSCL endorses two resolutions that would formally reject the Social Security pact with Mexico. Recently Representative Virgil Goode, Jr. (VA) , introduced H. Con. Res. 50, a resolution telling President Bush not to submit the U.S. Mexico Social Security agreement to Congress. Earlier this year TSCL also endorsed a resolution introduced by Representative J.D. Hayworth (AZ). H. Res. 20 would disapprove the U.S.-Mexico Social Security Agreement, stopping its implementation. This would be the only way for Congress to stop the U.S.-Mexico Social Security Agreement once the President sends it to Congress.
Sources: “Social Security, Better Coordination Among Federal Agencies Could Reduce Unidentified Earnings Reports,” GAO, February 2005, GAO-05-154. “Employer Responsibilities When Hiring Foreign Workers,” Social Security Administration, December 10, 2004. Statement of James. B. Lockhart, Deputy Commissioner for Social Security before the House Committee on Ways and Means Subcommittee on Social Security, March 10, 2004.
“Congressional Response Report, Social Security Administration Benefits Related to Unauthorized Work,” James G. Huse, Jr., SSA Office of Inspector General, March 18, 2003, page 12.
June 2005
