Supreme Court Holds That Denying SSI In Puerto Rico Is Constitutional

      Earlier this week I had noted that 16 of the 19 of the cases argued before the Supreme Court around the same time as U.S. v. Vaello-Madero, the case presenting the issue of whether it is constitutional to deny SSI to U.S. citizens who reside in Puerto Rico and other U.S. territories, had already been decided. My point was to expect a decision soon. The decision was announced today in U.S. v. Vaello-Madero. In an 8-1 decision the Court held that it is constitutional to deny SSI benefits in U.S. territories. Justice Sotomayor was the only dissenter. This issue goes back to the political arena. 

    Social Security has dodged a bullet. The agency would have had a terrible time dealing with an avalanche of SSI claims from Puerto Rico. If Congress does change the law so residents of U.S. territories can get SSI, the agency will have time to fully plan and staff up for the change and the change can be phased in.

Reason For Concern?

     I had posted yesterday that extending SSI to U.S. territories is part of the budget reconciliation bill pending in the Senate. Apart from the general threat of last minute snags on the bill as a whole, there is some reason for concern about the SSI part. The problem is arcane Congressional rules. Generally, any bill can be filibustered in the Senate. Budget reconciliation bills are a major exception. Those can't be filibustered. However, you can't put just anything in a budget reconciliation bill. One major rule is that no provision can be part of reconciliation if it would increase the deficit more than 10 years out. Generally, drafters of budget reconciliation bills get around this by including sunset provisions for budget reconciliation items that cost money. Extending SSI to the territories definitely costs money. However, the provision extending SSI to the territories contains no sunset provision (page 1682).

     I think this means that any Senator or Representative can object to the SSI provision. However, there may be some budget reconciliation exception that might cover this. I don't know. I'm no expert in Congressional rules. However, I'm not the only one asking the question.

    Would someone object? I'm not so sure. My guess is that this legislative provision is part of a settlement of litigation on the subject. I'd say that it's a reasonable settlement looked at from either a Democratic or Republican stance. I think the government's posture in the case pending at the Supreme Court is weak. Settling the issue in this way allows for a much better implementation of SSI for the territories. Doing it immediately as a result of a Supreme Court opinion would be a real mess.

     If someone objects, what happens then? Do they pull the provision altogether? Add a 10 year sunset? What is the deal, if there is one, with those litigating with the government on this issue. I don't know.

Budget Reconcilation Bill Extends SSI To Territories

      I spoke too soon about SSI changes not being in the budget reconciliation bill. The legislative text is now available and it includes one SSI change (page 1682) -- extending SSI to U.S. territories effective January 1, 2024. However, a case pending at the Supreme Court could extend SSI to the territories a lot sooner than that.

     Update to include some speculation: Maybe there won't be an oral argument in U.S. v. Vaello-Madero. Maybe an agreement was quietly made in that case and related cases. If the Biden Administration gets SSI for territories legislatively, the cases get dropped. That allows for an easier implementation -- giving Social Security almost two more years. (And I really think the government is going to lose this case if it is argued.) However, such an agreement would deprive claimants of benefits for that time period. That kind of deal is what I would have urged if I had been in the Solicitor General's office. I guess we'll see soon. The oral argument in U.S. v. Vaello-Madero is scheduled for November 9.

This Argument Seems Strong To Me

     From the Supreme Court amicus brief of the American Bar Association in U.S. v. Vaello-Madero, the case presenting the question of whether it is constitutional to deny SSI benefits to American citizens who reside in Puerto Rico:  

... As a threshold issue, all of the government’s justifications for the SSI law start from the premise that it has legitimate interests in treating Puerto Rico differently because of its territorial status. ...     

However, “[i]t is well settled that the Equal Protection Clause ‘protects persons, not groups.’” Engquist v. Or. Dep’t of Agric., 553 U.S. 591, 597 (2008) (citing Adarand Constructors, Inc. v. Peña, 515 U.S. 200, 227  (1995)). The “persons” whose equal-protection rights are implicated in this case are the particular Puerto Rico residents such as Mr. Vaello-Madero who would otherwise qualify for SSI, which is only a subset of Puerto Rico residents as a “group” or “jurisdiction.” The government’s justifications for the law must supply a rational basis for treating these particular individuals differently than similarly situated individuals who do qualify for SSI because they reside elsewhere. But because the government only focuses on how all Puerto Rico residents can be treated as a group, it fundamentally fails to provide a rational basis for discriminating against Mr. Vaello-Madero and similarly situated individuals who happen to reside in Puerto Rico. ...

Vaello-Madero Scheduled For Oral Argument On November 9

      The Supreme Court has revised its November argument calendar and added U.S. v. Vaello-Madero on November 9. Vaello-Madero presents the issue of whether it is constitutional to deny SSI benefits to U.S. citizens who reside in Puerto Rico.

     By the way, many amicus briefs have been filed already in this case. Every one supports the argument that it is unconstitutional to deny SSI to Puerto Rican residents.

    Also, by the way, the Supreme Court is going back to in person oral arguments for its October term. Will Justice Thomas go back to his silent ways?

No Looking Good For The Puerto Rico SSI Case At The Supreme Court

    U.S. v. Vaello-Madero,  the case pending at the Supreme Court that concerns whether it is constitutional to deny SSI benefits to U.S. citizens who reside in the territory of Puerto Rico, has been listed for review at the Court's conference this Friday. This is the third time the case has been relisted for review.

     I have little knowledge of Supreme Court practice so I'll quote someone who does: 

If a case has been relisted once, it generally means that the Court is paying close attention to the case, and the chances of a grant [that is, agreeing to schedule oral arguments in the case] are higher than for an average case. But once a case has been relisted more than twice, it is generally no longer a likely candidate for plenary review, and is more likely to result in a summary reversal or a dissent from the denial of cert.

     The decision in the Court of Appeals was that it is unconstitutional to deny SSI benefits to U.S. citizens residing in Puerto Rico so a summary reversal would mean no SSI for Puerto Rico residents. It seems unlikely that the Count would refuse to hear the case (deny the petition for a writ of certiorari) since it presents a constitutional issue and there is a good deal at stake.

What Can Be Done About SSI For Puerto Rico And Other Territories?

Puerto Rico's flag

     I had promised some ideas on what can be done about the possibility that the Supreme Court will find that it is unconstitutional to deny SSI benefits to U.S. citizens who are residents of Puerto Rico and other U.S. territories. If this happens, there's going to be an avalanche of claims. I suppose I haven't gotten around to writing about this before now because I doubt that much will be done.

     If Donald Trump is re-elected or if Republicans continue to control the Senate, I'm pretty sure nothing will happen in advance of a Supreme Court decision. In fact, I'm pretty sure that it will be difficult to mount an effective response even after a Supreme Court decision that SSI must be offered to residents in the U.S. territories if Republicans control the White House or the Senate. As a party, they are hostile to government benefit programs and to Hispanics and they're disinterested in government operations.

     If Democrats control the White House and the Senate, it may depend upon what Senate Democrats do about the filibuster. While most Senate Democrats favor doing something about the filibuster, Senators Manchin, Jones and Sinema, at the least, oppose this effort. Democrats will need more than a bare majority to nuke the filibuster.

     If Democrats do control the White House and the Senate and can get around the filibuster, they can give the Social Security Administration more money to implement SSI in the territories. The problem is that the agency needed additional appropriations a couple of years ago to start preparing for this. About all the agency can do now with more money is to throw a lot of overtime at it, not just in Puerto Rico and the other territories, but across the country. This is way too big a problem to be handled just in the territories.

     Another thing that Congress can do is what was done at the time SSI was first created in 1972 and came into effect in 1974. They can grandfather in recipients of Aid to the Aged, Blind and Disabled (AABD). You see, SSI wasn't the first needs based program of financial assistance to the aged, blind and disabled. AABD benefits go back to the 1935. It's Title XIV of the Social Security Act. Those benefits were administered by the states but mostly paid for with federal dollars. In order to reduce the challenges of initially implementing SSI, recipients of AABD were grandfathered onto SSI benefits. AABD went away once SSI was implemented, except in the U.S. territories where it persists to this day.

     The problem with grandfathering in AABD recipients, apart from Republican efforts to obstruct the effort, is that there aren't that many recipients of AABD. Puerto Rico is poor but it had only about 37,00 AABD recipients as of 2016, the most recent year for which I can find numbers, and almost half of those were aged recipients, the easiest category to put on SSI benefits. This contrasts with the estimated 700,000 Puerto Ricans which may qualify for SSI. Why so few AABD recipients in Puerto Rico? The average AABD benefit in Puerto Rico is only $77 a month and the income limit is only $65 a month. Grandfathering in AABD recipients is better than nothing but it doesn't get you very far.

     The only other thing I can come up with is that Congress could pass a bill giving SSI to the territories effective in 2023 before a Supreme Court decision. That would give time to prepare adequately. The plaintiffs from Puerto Rico and Guam with pending cases could be bought off. What would you do about others trying to get benefits before 2023? I guess you'd just try to stall them and hope there's not too many of them. Of course, to do this Congress would have to act before the Supreme Court gets around to the issue. I doubt that there is any way of delaying a Supreme Court decision past June 2021. Unfortunately, preemptively giving SSI to the territories would require that Democrats control the White House, the House of Representatives and the Senate, be able to nuke the filibuster and focus on this issue almost immediately after inauguration day. I'd be very surprised if that all happens.

     Does anyone have any better ideas other than hoping the Supreme Court holds that denying SSI to U.S. citizens residing in U.S. territories is constitutional? The Supreme Court could rule that way but as I mentioned in an earlier post, five federal judges have issued rulings on the issue so far and all five have found it unconstitutional even though four of the five were nominated by Republican Presidents.

     By the way, even if the Supreme Court rules that it's constitutional to deny SSI benefits to U.S. citizens who reside in the territories, we're not out of the woods. There is an effort to give statehood to D.C and Puerto Rico. There's a decent chance of that happening, depending upon the election result.