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By: Congressman Tom Tancredo (R-CO)
Totalization agreements have hardly been a source of contention over the years. Most of the public is familiar with hot button issues like border security, illegal immigration, and cost of living adjustments (COLA) - but totalization is only likely to get noticed when something perilous is afoot. Accordingly, I have grave concerns about the Social Security totalization agreement that Commissioner Jo Anne Barnhart signed with her Mexican counterpart on June 29, 2004, as this agreement could open the door and allow illegal aliens to receive benefits from an already strained Social Security system.
First off, let us be clear as to what a totalization agreement is supposed to be. The arrangement should allow legal alien workers and their dependents/survivors to receive Social Security payments for work performed in the U.S. or conversely benefit U.S. citizens working abroad.
The Social Security Act is what authorizes the President to enter into a totalization agreement with a foreign country to coordinate the collection of payroll taxes and the payment of benefits under each country's Social Security system for workers who split their careers between the two countries.
For example, without a totalization agreement, an individual who is sent by a U.S. company to work in a foreign country must contribute to the Social Security systems in both countries, resulting in dual Social Security coverage and taxation based on the same earnings.
Totalization agreements also allow workers who divide their careers between the two countries to combine earnings credits under both systems to qualify for benefits if they lack sufficient coverage under either system. While a worker may combine earnings credits to qualify for benefits under one or both systems, his/her benefit is prorated to reflect only the number of years the worker paid into each system. The same treatment applies to foreign workers in the United States.
Now, totalization agreements are subject to congressional review and the President is required to submit to Congress the text of the agreement and a report on the estimated number of individuals who would be affected by the agreement and the estimated financial impact of the agreement on programs established by the Social Security Act. However, a totalization agreement automatically goes into effect unless the House of Representatives or the Senate adopts a resolution of disapproval within 60 legislative days of the agreement's transmittal to Congress.
Congress has never rejected a totalization agreement and as a result, the fact that the mechanism available to Congress is likely unconstitutional has not been an issue. If I was skeptical about our chances to halt the implementation of this agreement last Congress, I am downright alarmed over our prospect of doing so under the new leadership of Senate Majority Leader Harry Reid (D-NV) and Speaker Nancy Pelosi (D-CA).
One objection to the Mexico totalization agreement is that the Social Security Administration (SSA) assumes that only 50,000 Mexican workers will apply for Social Security benefits. But with estimates of over four million Mexican workers here illegally, even a modest level of common sense indicates that the number will be significantly higher.
The SSA estimated last fall that the first year cost of the agreement with Mexico would be $78 million and would grow to $650 million in 2050. The Government Accountability Office (GAO) in a September 2003 report pointed out that these figures do "not directly consider the estimated millions of current and former unauthorized workers and family members from Mexico" who are already residing in the United States, making the cost of the agreement "highly uncertain." The SSA has yet to address these concerns and, in fact, used the very same cost estimates when it announced that the agreement with Mexico had been signed. The GAO has found that if a mere 25% above that 50,000 estimate (or 63,000) actually take up benefits, the results will be a financially "significant" drain on the trust fund. To assume that millions of Mexican workers will foolishly forfeit their benefits is unrealistic.
Primarily, this is a Social Security solvency issue - made dangerous by our illegal immigration problems. In recent years we have made some progress in limiting the ability of illegal aliens to become vested in Social Security. Specifically, a section tucked in the Social Security Protection Act significantly restricted the ability of non-citizens to qualify for benefits based on work performed in the U.S. illegally. Unfortunately, it did not entirely close the loophole because it does not prevent a foreign national who obtained a number legally at any time (whether they overstayed a valid visa or received amnesty after sneaking in) from using the work done while out of legal status to help vest towards the benefits.
Reasonable people should agree that the Social Security trust fund should not pay benefits to illegal workers. My colleague Sam Johnson (R-TX) said it best: "Coupled with the ill-considered immigration proposal from the Administration, this totalization agreement would wreak havoc on our already troubled Social Security system and is a recipe for disaster."
If only fully legal workers were to collect benefits only for work done legally, it might be worth a closer look. But even if the "attrition through enforcement" sentiment of last year's House were to continue under its new management, the dissimilarity of this agreement from those already in effect should compel us to take pause before plunging in headlong. So few Americans stand to benefit from this agreement that it would be wiser to wait until Mexico implements some significant and long overdue internal economic reforms.
Signing a totalization agreement with Mexico now is the same bad idea that it has been for the past three years. As members of a group who have a vested interest in this debate, I encourage you to join me in demanding that this Administration spend less time promoting policies and practices at the behest of the Mexican government, and more time advocating on behalf of the American public.
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