Plan overburdens the trust fund

In addition, senior citizen groups such as "The Seniors Coalition,"' 172 are concerned that the Trust Fund will not be able to provide for Mexican nationals who may benefit from the Social Security system under this agreement. 173 The Retired Enlisted Association ("TREA") Senior Citizens League has recently sent a petition to Congress trying to initiate another attempt to adopt a resolution aimed at blocking a U.S.-Mexico agreement. 74 Another concern raised by critics is that a totalization agreement with Mexico will promote a policy that encourages Mexican citizens to immigrate, legally or illegally, to the United States in order to qualify for SSDI and other benefits. 75 Many critics fear that if an agreement is allowed to take effect, Mexicans will become eligible for Social Security benefits regardless of their legal status in the United States. 76 This eligibility could cause an increase in the incidents of fraud against the Social Security system if Mexicans systematically claim disabilities which may or may not actually exist.177 Another complaint from critics is that once a Mexican national is vested in the U.S. Social Security system, benefits will be paid to the worker and his spouse for the remainder of their lives, and because the current U.S. Social Security system is progressive, benefits are incrementally better for low-wage earners. The critics fear that this payout will add too great a burden on the Trust Fund. 17 8 The fears swirling around the U.S.-Mexico agreement are only exacerbated by a recent General Accounting Office ("GAO") report that states the "cost of such an agreement is highly uncertain.', 179 The GAO report lists several areas of concern in trying to determine the true cost of an agreement. 180 These areas of concerns include: the SSA's process for developing the agreement was neither thorough nor well-documented, 181 the research of the Mexican Social Security system was too informal to validate the integrity and compatibility of the Mexican system with the U.S. system,' 82 and poor data was relied upon by the SSA. 183 This poor data was used to project the short-term and long-term costs of the totalization agreement with Mexico.184 Mexico's social security program is not as financially beneficial to low wage earners as the United States' program.185 The Mexican program takes 1,250 weeks of contributions, or a full twenty-four years, to become vested in the program, and even then the worker only receives what he or she actually contributed plus interest.186 By comparison, the United States fully vests workers after only forty credits, which could be earned in as little as ten years. 87 Mexican social security is divided into two separate systems: one for the private sector and another for the public sector.' 88 The Mexican program for the public sector is in dire straits because the promised benefit is 100% of the last twelve months of salary upon retirement and the retirement age in Mexico is fifty-six with a current life expectancy of seventy-eight. 89 Currently, the ratio of workers per retirees in the public sector is five-to-one, but this is expected to change to two-to-one by 2020.190 Mexico's private sector's social security program has been converted from a "defined-benefit" plan to a "defined-contribution" plan that provides the Mexican government some short-term relief from bankruptcy.191 A large majority of Mexican workers may opt out and not contribute anything to their retirement, which is one of the problems with the Mexican "defined-contribution" plan. 1 92 1. Fiscal impact of a Totalization Agreement with Mexico. The impact of a totalization agreement with Mexico is unclear. 93 According to the Office of the Chief Actuary ("OCACT"), the estimated cost of the first year of a totalization agreement with Mexico will be $78 million (in constant 2002 dollars) and will grow to $650 million by 2050.194 The SSA's cost estimate assumes that the initial number of newly-qualified Mexican beneficiaries would be 50,000, or the number of current beneficiaries now living in Mexico, and the number will grow six fold over time.195 This number seems to be rather small in comparison to the 7.8 million Mexican immigrants estimated to be in the United States as of 2001.96 A GAO review of other totalization agreements shows that the actual number of beneficiaries was frequently underestimated and far exceeded the original actuarial projections. 197 The possible underestimation of the number of Mexican beneficiaries is problematic because only a 25% increase in the estimated beneficiaries, or an additional 13,000 beneficiaries, would have a measurable impact on the long-range actuarial balance of the Trust Fund. 198 The fiscal impact of the actuarial data being underestimated in the case of Mexico could be severe. 199 The U.S. Census Bureau projects that Mexico accounts for around 30% of all immigrants in the United States or 7,800,000.200 This projection makes Mexico the single largest country of origin for any immigrant group found in the United States, nearly six times greater than the next highest country.0 1 Meanwhile, Canadian immigrants total about 678,000.202 When considering that the SSA estimates only an increase of 50,000 newly-qualified beneficiaries under a Mexican agreement, it is hard to understand why the SSA did not address the other 7,750,000 Mexican immigrants currently in the United States.20 3 The SSA projects that the amount of eligible beneficiaries will increase only six fold by 2050, which would only amount to 300,000. Again, the SSA does not address the other 7,500,000 Mexican immigrants in the United States. 204 The OCACT based its initial estimate of 50,000 on the premise that the number of Mexican immigrants who had worked in the United States for enough time to be vested with Social Security benefits equaled the number of immigrants who worked in the United States between two and nine years before returning to Mexico.2 °5 In other words, initial new beneficiaries would be equivalent to the 50,000 recipients currently receiving benefits in Mexico.20 6 According to the GAO, the OCACT did not determine whether the 50,000 persons currently receiving benefits would serve as a good measure for the Mexican immigrant population, 20 7 nor did it appear that the OCACT adjusted its projections for the huge increase of Mexican immigrants into the United States from 1990 to 2000, or the increase since 2000.208