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SS to Pay $100(s) of Billions to Illegal Workers

Bruce Krasting's picture




 

I wrote a blog
recently regarding a comment made to the WaPo by Steve Goss, the boss
at the SSTF. Goss confirmed that as of 2007 SS had collected as much as
$240b from undocumented workers. That blew my mind. I knew there had to
be money, big money. But I did not think it could be that high. The
number has grown since 2007, and the whole ball of wax is earning
interest. So where is this money going to go? I’ll refine the issue:
Assume:
A person comes illegally to the US and illegally obtains a fake SS and
using that fake # finds work. This person stays in the US continuing to
work illegally for many years. During that period this person has SS
payroll taxes deducted from their paycheck. This person returns to
(Mexico) and at age 62 applies for SS retirement benefits.

Question: Is this person entitled to receive benefits? If so what are the conditions for payment?

Well, I got this wrong. So did all the people I asked (including a
lawyer). How about you? The answer is that an illegal worker using an
illegal SSN has the same rights to SS benefits as a legal worker with a
legal SSN. The only difference is that the person who worked illegally
must receive those SS benefits outside of the USA.

In 2006 the Ensign Amendment was drafted to eliminate this interesting
treatment. The bill was defeated in the Senate by a 49-50 vote. Senator
Leahy (D.Vt.) said at the time:

"We
should not steal their funds or empty their Social Security accounts.
"That is not fair. It does not reward their hard work or their financial
contributions. It violates the trust that underlies the Social Security
Trust Fund."

Goss put a number of $240b as of 07 out there. I took that estimate and
extrapolated where it might be today. I came up with 1/3 of a trillion.
What might be the future liabilities of SS regarding this? About $500b.
Should that be the result, that amount MUST be paid (and spent) outside
of our borders. This makes no sense to me. None of it does. But that is
the way it is.

My original post was bashed to pieces at another site, Angry Bear. There
were some interesting comments that I participated in. A lady that
works for SS made some important contributions. She had a fair bit to
say. She explained how the SSN’s are illegally obtained. She describes
her role in facilitating payments to beneficiaries who worked in the US
illegally and that used fraudulently obtained SSNs. The AB site does not
like me and what I write. Neither do their contributors. The lady who
made available the clarifying information does not like me much either.
Her final thoughts:

Sir, give this up. It is dishonest, misleading and wrong to do what you are doing. I am finished writing to you on this subject.

The entire discussion can be found here. Some cut and pastes from the comments section:

SS does
not keep track of benefits paid by beneficiary immigration status. That
is because as far as the program goes, it doesn't matter. Earnings in,
benefits out. To emphasize, it is perfectly legal for a person to
receive SS benefits on wages earned while in the country illegally as
long as the person receives those benefits outside the US. It has always
been legal as far as I know. I was hired as a bilingual speaker of
Spanish to process these claims and did so personally or in a
supervisory capacity.

They (SS) hired me to take claims from people who were insured for
benefits, illegal or not. Then, of course, people can go home and get
checks. This is LEGAL. Believe it or not, perfectly legal. If Congress
had intended to, it could have passed a law making all those quarters of
coverage disappear. But, they didn't and they haven't and I'd be
surprised if they ever do.

Again, the real kick in the pants is that the money MUST be paid out of
the country. Who says America does not have great legislators and great
laws? No wonder we are becoming second rate.

 

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Wed, 09/08/2010 - 00:05 | 568809 Arm
Arm's picture

So this would mean that Europe, and Japan's inverted population pyramid is the secret to prosperity?  Silly me. 

Let's just shoot the bottom 30% and eliminate poverty.  That should work shouldn't it?

Wed, 09/08/2010 - 04:43 | 568992 fajensen
fajensen's picture

And Yet, Japan and Europe is doing much, much, better than Pakistan which should whup our asses with it's 5% p/a population growth!

My son travels a lot in Japan, so we know what it look like on the ground - I would swap their "recession" for our "recovery" at any time; The living standards for the majority of the population are so much higher than here that it's unreal!

The truth is: More people is just more overhead in an industrialised society where most of the value is created inside automated factories.

You need more *productive* people, if prosperity-through-population-growth is your goal; One "solution" could be to pop out more babies, Another is immigration. Both ways still leaves the icky problem of removing the unproductive from the pool of potential ressources.

The US seems to favor a form of social darwinism which can work until the unproductive instead of blaming themselves for failure and getting themselves killed in anger over it, starts to vote and blame others.

Europe tried to make the population more productive through education and training. This worked up to a point, which IMO ended in Europe in the 1990's because when everyone is "at capacity" the available talent is exhausted; you cannot just train a dullard into being a high achiever.

A shrinking population is perfectly fine and healthy because the part of the productive economy needed to feed the useless people will also shrink.

The only people whining are, in fact, the exploiters: Governments, who have lesser heads to tax, smaller social security payments as The Excuse for raising taxes; Economists who are wrong about everything, Banks who need sucker to take out Option ARM's and Employers who are still living in the early 19'th century where salaries were more expensive than the payments for the machinery and the IPR.  

 

Tue, 09/07/2010 - 19:34 | 568366 thesapein
thesapein's picture

A growing population does not translate into lower wages. Adding new people does not mean shrinking the economy.

Plus, we're dreaming if we think we can keep our wages unfairly high via the petro-dollar forever. A correction is over due.

Wed, 09/08/2010 - 11:42 | 569548 Suisse
Suisse's picture

You're an anarchist troll and need to be banned just like chumbaba and the the anti-semitic brigade. Population does not, and absolutely cannot increase indefinitely. Per capita GDP is actually expected to decline, these third world poor will not vote for "libertarian" measures, they will vote for wealth transfers as they are peasants who lack a high school education.Why do you think California is the least educated state in the country?

 

It's ok, the environment will be wrecked, co2 emissions will skyrocket, and anything larger than a household dog will go extinct in the U.S.

Wed, 09/08/2010 - 16:56 | 570449 thesapein
thesapein's picture

He wasn't banned or suicided or anything dramatic. And just because we both smoked the same stuff, didn't mean we always agreed on what the plant was trying to tell us.

Right, populations have limits. I'd go further and say that each person, too, is mortal. You can't just grow and grow and expect to live forever. However, this isn't reason to give up on yourself. Evolve. Adapt. Learn to embrace the challenges. Having trouble competing with just your inner cliche? Well, you're probably not going to survive competing on a global scale, and then I would agree that it's probably in your best interest to keep our exported labor, well, exported.

Wed, 09/08/2010 - 18:41 | 570622 RichardP
RichardP's picture

Having trouble competing with just your inner cliche?

I love it.  That's got to be a tag line for a book or movie or frozen yogurt or something.

Tue, 09/07/2010 - 17:50 | 568124 ghostfaceinvestah
ghostfaceinvestah's picture

Can someone publish a roll call on the vote that defeated the Ensign Amendment?

 

Tue, 09/07/2010 - 17:45 | 568117 Problem Is
Problem Is's picture

When Are You Vermont Voters Going to Get Rid of That Douche-Bag Leahy?

Senator Leahy (D.Vt.) said at the time:

"We should not steal their funds or empty their Social Security accounts. That is not fair."

What is not fair?
That they are here illegally, Leahy you idiot...

"It does not reward their hard work or their financial contributions. It violates the trust that underlies the Social Security Trust Fund."

I hereby propose to use SS funds to ship Leahy, the SS lady and Angry Bear staff to Mexico...

If you are here illegally... the only right you have is an appearance before a Federal judge and a ride back to the border. The rest is utter political class stupidity...

I nominate Leahy for the "Krugman of the Week Award."

Vote that idiot out...

Wed, 09/08/2010 - 09:25 | 569206 Dr. No
Dr. No's picture

We should not steal their funds or empty their Social Security accounts. That is not fair."  I see this a different way.  Leahy understands that leveing the funds in SS is more money in his back pocket, afterall SS is a bunch of IOUs.  By leaving the money there, they are not paying out.

Tue, 09/07/2010 - 18:36 | 568240 Rainman
Rainman's picture

+ 100-00-0000.

Let us never concede that the abnormal must become normal.

Tue, 09/07/2010 - 17:40 | 568105 FortyTwoIsTheAnswer
FortyTwoIsTheAnswer's picture

If a SS# is obtained illegally, what is to stop the illegal holder of the SS# from lying about their age? Couldn't they claim they were much older than they were and collect benefits for a much longer period of time?  (I realize the benefit paid out is somewhat proportional to what is paid into the fund; but this would impact the actuarial calculations)

I have to question why the SS Admin would pay out benefits on what is obviously a fraud (the illegal SS#). Perhaps by treating all payments equally, they avoid liability for taking what are known to be payments from illegals?

Wed, 09/08/2010 - 08:40 | 569126 au_bayitch
au_bayitch's picture

+1 Good ideas. Maybe you have singled out the next step in identity theft. What steps does the SS admin implement to stop this? They never cared where the revenue came from, will they safeguard the legitimate recipient of the benefit payments?

Tue, 09/07/2010 - 19:24 | 568349 mikla
mikla's picture

+1

Ditto for Medicaid/Medicare/SNAP ... when it's free, the incentive is to collect several checks every month.  When you can "plug in" illegally at low cost and low risk, there's no reason not to do so several times.  This is not rare:  Those programs are paid to issue checks, and NOT paid to police where the check goes, and many establishments are ever-so-helpful at receiving-and-cashing your checks for you.

In fact, all welfare programs have an incentive to pay out as much as possible (so appropriations will increase each year).  Efficiency is never a goal in any Federal program.  (Why should it be?)

Tue, 09/07/2010 - 17:39 | 568104 Invisible Hand
Invisible Hand's picture

Bruce,

I give you credit for admitting your own (previous) argument was a crock of s#&t.  At least I am giving you the benefit of the doubt on this.

As I said on your previous post on this subject: YOU WERE PLAYED!

The article you originally quoted from on this issue was a politically motivated dis-information piece to help give Obama coverage for his on-going efforts to destroy the USA.

You are a smart man and your posts are well written and informative but you need to wake up and smell this coffee: "Either the elites of this country (Rep and Dem) will be destoyed or this country will be destroyed".

Tue, 09/07/2010 - 17:39 | 568101 patience...
patience...'s picture

Lets see.. Illegal immigrant, forged documents, corrupt employer,

and now a 32 year vet of the SSA defending the practice.

Sweet, Is this a great country or what.

Tue, 09/07/2010 - 20:48 | 568506 dark pools of soros
dark pools of soros's picture

and sure, I bet they all live to be 190 years old back in Mexico since why should they ever say the stiff died??  free money for a few generations!!!

 

Tue, 09/07/2010 - 17:55 | 568137 thesapein
thesapein's picture

A great country would not label people as illegal in the first place.

Tue, 09/07/2010 - 21:53 | 568638 RichardP
RichardP's picture

thes - what is the point of borders if folks are free to come into a country at will?  The borders are what define a country.  A country without borders is not a country.

Tue, 09/07/2010 - 23:04 | 568725 thesapein
thesapein's picture

That's a very good question. Is this not just about labeling a behavior or group but also about the very idea of sovereignty? I'm going to take this question of yours very seriously and think about it.

(meanwhile partaking in a criminal act involving a leaf and pipe and pondering am i an illegal) 

Wed, 09/08/2010 - 01:55 | 568905 RichardP
RichardP's picture

While you are thinking (illegally), think about the history of groups.  Always, an alpha male will arise in some group.  Out of a number of groups, the alpha male of one group will always be stronger than all other alpha males in other groups.  The group with the strongest alpha male will subjugate the other groups; they will do his bidding.  These small groups will coalesce into one larger group, under the leadership of the strongest alpha male.  At some point, foodstuffs and handcrafts will be plundered by the larger group.  Perimeters will be erected and protected to keep the plundered from coming to get their stuff.  That is the barbaric way it is done.  Eventually, the barbarians will morph into civilized folks, but they will still plunder goods, and erect and protect perimeters.  That behavior is fundamental to the way humans operate.  The majority may want to make nice and share everything, including land.  And that situation may exist for a while.  But all it takes is one alpha male to beat up some junior males and turn them into his henchmen and he will come in and dominate the sharing group.  Goodbye sharing; hello plundering and protected perimeters.

You may wish to get rid of sovereignty.  You might for a while.  But due to human nature, it will always come back.  And when it does, you might end up on the wrong side of the perimeter.

Or, to put it another way, is it reasonable for the ants to refuse to share their store with the grasshoppers?  Isn't refusing to share an act of sovereignty?  Does refusing to share make any sense on any level?.

A sovereign country, with defended borders, is simply a collection of single individuals - each saying about their own food and handcrafts: this is mine, you can't take it.

You imply that you have a problem with sovereignty.  I actually don't think you do.  I think you just haven't thought it all the way through yet.  Let someone take away all you have and you'll have nothing left to survive on.  I don't think you would let that happen if push came to shove.  Sovereignty is simply an extension of that personal response to protect what is yours - multiplied by each person living in the country.

As I've presented in a different post in this thread, we can loosen the perimeter a bit and let the "invaders" in to take something.  But unless you are willing to let them take everything you have, you must set a boundary/perimeter somewhere - anywhere from taking nothing at all to taking almost everything but not quite.  Regardless of where you set the boundary/perimeter, it is still a boundary/perimeter.  Unless you let the "invaders" take everything, you are establishing sovereignty in the act of setting a boundary/perimeter that says this much and no more.

No matter how you slice it, you can't get away from the need to protect your assets.  Multiply that by all the people in the country and you end up with a national border.  Sovereignty.

Wed, 09/08/2010 - 15:54 | 570231 thesapein
thesapein's picture

Who's your daddy? You must have an alpha male, yes?

I think the more a group bestows power on another speaks more volumes about the weaknesses of the group and not so much the strength in their king.

But even if I did play along, I'd still have to ask what protecting your own has to do with immigration. Are you saying something like what another poster here said, i.e.; it's an invasion?!?!?

Wed, 09/08/2010 - 18:32 | 570603 RichardP
RichardP's picture

You raised the issue of sovereignty, and I was addressing that.  Do national borders make sense?  Why are defended perimeters necessary?  I was addressing those questions from the standpoint of the human condition.  History demonstrates that everyone must eventually construct a defense against the rogue alpha male.  We might wish we could live in peace and harmony.  Testosterone sees to it that we never will.  Somewhere, some guy will establish a band of marauders and will take whatever he can take.  That is the story of history.  It answers the question of why we have borders.  It answers the question of why nations require people to have permission to cross their borders.

Another poster may have said it's an invasion - but I also said that folks who cross national borders without permission are invaders.  The governments treat them as such by expelling them.  But, in this post, I was addressing the question of sovereignty, of why nations (or city-states) have borders.  Food for thought.  Not solutions.  I was not addressing the issue of illegal immigration.

Wed, 09/08/2010 - 10:50 | 569413 downrodeo
downrodeo's picture

They're working, what are they taking?

oh yeah...

 

http://www.youtube.com/watch?v=KLni3wbndls

 

 

Wed, 09/08/2010 - 16:43 | 570404 thesapein
thesapein's picture

lol, was a great episode!

Makes me think, what if each state and then each city also had border patrols? That would sure help the economy and fix all this steal'n of jobs.

Wed, 09/08/2010 - 18:31 | 570580 RichardP
RichardP's picture

I actually think we are on our way back to city-states.  We already have them in the form of gated communities.  If we can't get the financial system fixed so that it actually works again, I think saving and lending is going to become local, with local perimeters established and defended.

Wed, 09/08/2010 - 20:39 | 570795 nmewn
nmewn's picture

thespian seems to be of the view perimeters should not be defended.

I hope he never has to test his view in real life, instead of theorizing from the faculty lounge over lattes ;-).

Wed, 09/08/2010 - 06:59 | 569041 SWRichmond
SWRichmond's picture

Nah, his/her holier-than-thoughness above just wants to hire them to be gardeners.  Besides, how arrogant/presumptuous/moronic does one have to be to use the avatar he/she uses?

I think you just haven't thought it all the way through yet.

+1

Tue, 09/07/2010 - 19:50 | 568397 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Why not spend some time in Mexico as an American citizen and see how they treat you?

Illegal means that person has not ffollowed the legal process for entry. Every sovereign nation on earth has rules about entry and exit from their boundaries.

Illegal proves, that the person who has that status, has no concern for the laws of other countries.

Illegal is not some American racist idea.

If you go to Iran without permission they will put you in prison for a couple of decades.

As soon as you get countries like Iran to stop jailing illegals for being illegal we can work on how bad the USA is.

You can also allow every illegal in the country to stay at your house. Now that would be the act of a great citizen.

Being great is better than a label.

 

 

Tue, 09/07/2010 - 22:50 | 568714 thesapein
thesapein's picture

Now, people are referencing other countries as their source of morality? Yes, other countries are much worse. Yes, that is often why people are getting the heck out. No, we should not copy their laws just because they're already doing it.

If some people start showing up at my house wanting to produce and provide, fantastic. This house needs a lot of work by people with real crafting skills. Maybe a bigger garden out back would be super, too.

Wed, 09/08/2010 - 11:48 | 569569 RockyRacoon
RockyRacoon's picture

I have great respect for your position and your tenacity in defending it.  (Here comes the butt-monkey...)  But, I think you'll be on the wrong side until the law is changed.   As many have pointed out, the morality of the situation is really not an issue.  The law is.  Those here defending the law are right in the limited position they are taking.   When Arizona took the "law" into its own hands it was because the law was not being obeyed.  Drawing attention to an unjust or immoral law is the key.  I suggest that you focus your efforts toward getting what you may consider a bad law changed.   Thanks for your passion.

Tue, 09/07/2010 - 19:47 | 568391 Everyman
Everyman's picture

A murderer is illegal, and yes SO is an illegal entrant.  It is a person whom comes to this country in the unaccepted and legal manner.  Hence for slow people like you ILLEGAL.

Stealing is illegal.

Confidence games are illegal.

Take your stupid "nobody is illegal" argument to a prison.
That is the stupidest thing ever posted here.

 

BTW BRUCE I TOLD YOU SO.  ILLEGALS GET BENEFITS!!!

They will be stealing these benefits from American citizens (Whom are legal) and that means from grandma and grandpa, and the kids (no matter what race, no matter what culture, no matter if they are LEGAL RESIDENTS or LEGAL IMMIGRANTS all of which are GOOD for America) however the illegal alien and illegal immigrant is stealing from all thos LEGAL AMREICANS!!!!

 

Time to chose a side, and the idiots are on the other side of this one.  80 % of the citizens think illegal immigration needs to be stopped, and NO BENEFITS AT ALL.  You get no benefit from crimes.

Wed, 09/08/2010 - 03:47 | 568975 Hephasteus
Hephasteus's picture

So you have hit upon the crux of modern law. Legal means legitimized. I punish you with an eternity in hell.

http://www.youtube.com/watch?v=Cdk1gwWH-Cg

Tue, 09/07/2010 - 23:32 | 568770 Bruce Krasting
Bruce Krasting's picture

You were right, I was wrong. I am still in disbelief. How could we be so F..... stupid.

Wed, 09/08/2010 - 10:31 | 569359 Rich_Lather
Rich_Lather's picture

This situation is going to be ripe for fraud. I can't wait to see how many illegals live to the age of 120+.

Wed, 09/08/2010 - 00:10 | 568823 Jasper M
Jasper M's picture

In famous words of Tonto,

"what you mean 'We', white man?"

Wed, 09/08/2010 - 13:48 | 569876 hbjork1
hbjork1's picture

Jasper M,

That is one of my favorate jokes and it has been around for at least 60 years.  Are in the same age bracket or has it been passed down?

 

 

 

Tue, 09/07/2010 - 22:36 | 568693 thesapein
thesapein's picture

And English is your native language? Hey, I don't suppose you speak better Native American of one tribe or another, no? Only the Queen's tongue, eh? Well, you make for a perfect servant. Keep studying those laws, and keep a look out for savages.

Wed, 09/08/2010 - 11:08 | 569471 Almost Solvent
Almost Solvent's picture

The EMPLOYERS need to be held responsible for hiring the illegal in the first place.

The penalty should be 3x whatever wages were paid to the illegal.

That would stop most illegal hiring immediately.

Tue, 09/07/2010 - 23:41 | 568780 patience...
patience...'s picture

Can you say for sure the Native Americans didn't displace a previous

race.

Legal or Illegal is the moniker for the title of being a citizen or not.

Wed, 09/08/2010 - 01:25 | 568888 snowball777
snowball777's picture

Yes, or they've hidden the bones really, really well.

So which does my O1 work visa make me?

Tue, 09/07/2010 - 18:25 | 568214 ShatteredArm
ShatteredArm's picture

Jean-Jacque Rousseau would probably disagree with you.

Tue, 09/07/2010 - 17:39 | 568099 Goldenballs
Goldenballs's picture

Take a leaf out of Frances book today.The Politicians,Central Banks,etc, are making minor changes when all they are really interested in is their own job preservation.Illegal workers are a symptom of how bad things are,the country can,t afford any more Mr Nice Guy,start removing them today.Time to organise and hit the streets,put the pressure on the authorities to properly sort this country out. 

Tue, 09/07/2010 - 17:38 | 568098 Grand Supercycle
Grand Supercycle's picture

DOW/S&P500/FTSE/EURO short signal continues :

http://stockmarket618.wordpress.com

Tue, 09/07/2010 - 17:37 | 568092 Dr. No
Dr. No's picture

Funny.  I can see it now.  "I got some good news and some bad news.  The good news is you can get $500/month SS check due to your payroll tax.  The bad news is you owe $20k back income tax and $60k late filing penalties since you never filed a return..." 

Illegal worker will decline the SS check and shrug it off as the price of doing business.

Tue, 09/07/2010 - 22:51 | 568715 moneymutt
moneymutt's picture

Actually, a tax guy I talked to while he was doing my taxes said he had numerous customers that presented him with multiple W2 for different SS#'s...he would just ask, which ones of these is you, and file taxes for all their income. He said it was come for illegals to pay their taxes on all their incomes because they were afraid of IRS, not SocSecurity getting mad they were paying under several numbers, Soc Security did not enforce, IRS did.

Many illegal immigrants may not taxes, but I would not assume that is always the case or even the majority case.

Wed, 09/08/2010 - 09:21 | 569197 Dr. No
Dr. No's picture

I always assumed they had tax withheld.  I guess I didnt know many of them acutally filed a 1040.  I figured they just let uncle sam keep the withholding (i.e pay more tax than they needed to).

Wed, 09/08/2010 - 10:35 | 569373 DOT
DOT's picture

It is built into the system- file only when you want excess tax returned or to claim benefits. The government will be glad to keep everything if no one asks (or demands) that it be returned.

Tue, 09/07/2010 - 17:36 | 568085 bugs_
bugs_'s picture

Another point to be made here is that the money is expatriated further reducing domestic money velocity.

Tue, 09/07/2010 - 17:33 | 568069 Geoff-UK
Geoff-UK's picture

Immigration will not be reduced in our lifetimes.  We are doomed.

Tue, 09/07/2010 - 17:52 | 568127 thesapein
thesapein's picture

Why do you want to reduce immigration? What's so great about people born inside the country and so bad about the rest of the world?

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