I’m not quite sure why you think it’s such a big deal in terms of debate (implying there is some controversy.) The U.S. has similar social security treaties (usually called “totalization agreements” with most of Europe, some of them going back several decades, and with Canada.
Example: A person from Country X comes to work in the U.S. He works here for nine years, contributing into U.S. social security, and his employer does likewise.
Then he goes back to Country X, and works there the rest of his career, say another 30 years, contributing to Country X’s social security. At retirement age, he applies to Country X for benefits. They say, well, OK, but you only worked 30 years in our country, and contributed to our social security for 30 years, so you don’t get full benefits – full benefits are based on (let’s say) 35 years, so you only get 30/35ths of the full benefits. That’s reasonable, since he gets a benefit based on his contribution.
So, he writes to U.S. social security saying, I worked in the U.S. and I paid into U.S. social security for nine years, do I get a pro-rata benefit?
Without the treaty, U.S. social security says: No way. For benefit eligibility, you need 40 covered quarters (approx ten years), and you have only 9 x 4 = 36 covered quarters. You therefore aren’t eligible for benefits. So, all that money that you and your employer contributed for nine years, thanks very much, but you get zip.
Employees (and employers) consider that they were screwed, paying taxes/contributions but not alowed to get a benefit. Thus, U.S. companies have been pressuring the U.S. government to set up social security treaties.
Most U.S. treaties work as follows. Let’s use the same example, but now say there IS a social security treaty between the U.S. and Country X. When he applies for benefits in the U.S., two things happen:
(a) The U.S. will count all his years of contribution to Country X social security towards the eligibility. So, he will have 36 covered quarters in the U.S. plus 30 years in Country X. That says he will be eligible for a benefit from the U.S.
(b) The benefit will be calculated based on the amount of contributions actually made into U.S. social security. So, he won’t get a full (maximum) benefit, he’ll get (roughly) a pro-rata amount.
Thus, he’ll wind up with benefits from both U.S. and X social security systems.
This is basically considered fair, under any interpretation you can come up with.
And, please note, the reverse will happen as well. An American goes to Country X and works there for 5 years, say, contributing into their very expensive social security system. (U.S. rates are fairly low compared to most of the rest of the developed world.) When she gets to retirement, she applies to Country X for benefits and is told, sorry, in our country, you need 7 years of coverage to be eligible for a benefit and you don’t have it. So, you don’t get any benefits, thanks a lot for the taxes/contributions. She says, AHA! There’s a treaty between the U.S. and Country X! They say, oh, so there is, in that case, yes, you get the prorata benefit of 5/35ths (or whatever.)
So, it works to the mutual advantage of employees who are transferred between countries, or citizens of one country who work temporarily in the other country. It works to the advantage of the companies who pay half the social security taxes. Both the Country X and U.S. social security system pay some benefits that they otherwise wouldn’t have paid.
It’s part of the positive process of globalization.
There are tax treaties, by the way, as well, so that a U.S. citizen who works in a country with a treaty arrangement won’t be double-taxed… taxed by Country X and taxed by the U.S., on the same income. We have tax treaties with most of the world, but social security treaties with only a comparative handful of countries.