Guest Column
Totalization is a Bad Idea
By Rep. Ron Paul
Jan 08, 2007
Through a Freedom of Information Act Request, a private
group recently obtained a copy of a 2004 agreement between the United States
and Mexico that will allow hundreds of thousands of noncitizens to receive
Social Security benefits.
The agreement creates a so-called “totalization” plan between the two
nations. Totalization is nothing new. The first such agreements were made in
the late 1970s between the United States and several foreign governments
simply to make sure American citizens living abroad did not suffer from
double taxation with respect to Social Security taxes. From there, however,
totalization agreements have become vehicles for noncitizens to become
eligible for U.S. Social Security benefits. The new agreement with Mexico
would make an estimated 160,000 Mexican citizens eligible in the next five
years.
Ultimately, the bill for Mexicans working legally in the U.S. could reach
one billion dollars by 2050, when the estimated Mexican beneficiaries could
reach 300,000. Worse still, an estimated five million Mexicans working
illegally in the United States could be eligible for the program. According
to press reports, a provision in the Social Security Act allows illegal
immigrants to receive Social Security benefits if the United States and
another country have a totalization agreement.
It’s important to note that Congress, like the American people, heretofore
had not seen this totalization agreement. This decision to expand our single
largest entitlement program was made with no input from the legislative
branch of government. If the president signs it, Congress will have to
affirmatively act to override him and in essence veto the agreement. This is
the opposite of how it’s supposed to work.
There are obvious reasons to oppose a Social Security totalization agreement
with Mexico. First, our Social Security system already faces trillions of
dollars in future shortages as the Baby Boomer generation retires and fewer
young workers pay into the system. Adding hundreds of thousand of
noncitizens to the Social Security rolls can only hasten the day of
reckoning.
Second, Social Security never was intended to serve as an individual foreign
aid program for noncitizens abroad. Remember, there is no real Social
Security trust fund, and the distinction between income taxes and payroll
taxes is entirely artificial. The Social Security contributions made by
noncitizens are spent immediately as general revenues. So while it’s
unfortunate that some are forced to pay into a system from which they might
never receive a penny, the same can be said of younger American citizens. If
noncitizens wish to obtain Social Security benefits, or any other U.S.
government entitlements, they should seek to become U.S. citizens.
Also, totalization agreements allow noncitizens to quality for Social
Security benefits by working in the U.S. as little as 18 months. A Mexican
citizen could work here for only a year and a half, return to Mexico, and
retire with full U.S. benefits. This is grossly unfair to Americans who must
work more quarters even to qualify for benefits-- especially younger people
who face the possibility that there may be nothing left when it is their
turn to retire.
Those in favor of sending U.S. Social Security benefits to Mexican citizens
argue that crushing poverty in Mexico demands some form of U.S. assistance
to that country's aged. While poverty in Mexico truly is deplorable and
saddening, the fact remains that Congress has no constitutional authority to
enact what is essentially another foreign aid program.
Dr. Paul represents the 14th District of Texas in the U.S. House of Representatives. He is the author of Challenge to Liberty, The Case for Gold, and A Republic, If You Can Keep It.
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