AFTERTHOUGHTS • Social Security: Moral Right But Not Legal One


"Did you know about this? That no one is guaranteed to get Social Security," Butler resident Don Walker said to me at the front counter of the newspaper office a couple of weeks ago.

I did not know that.

He handed me a pamphlet that he had received through the mail that said although most people think Social Security is a contract with the government, nothing could be further from the truth.

"The sad truth is–and this is not readily known–back in 1960 the Supreme Court ruled (Flemming v. Nestor) the government has no legal, contractual obligation to pay back our hard-earned Social Security contributions," the pamphlet warns.

Flemming v. Nestor? That was just begging for some research.  But first, an important warning: the quoted pamphlet sets off scam-alert sirens all over the internet, including from the Better Business Bureau.  It's main purpose is to scare donations to support legislation that doesn't exist.  That said, the point that Social Security is not a guarantee is accurate, according to the Supreme Court ruling in Flemming v. Nestor.

"The fact that workers contribute to the Social Security program's funding through a dedicated payroll tax establishes a unique connection between those tax payments and future benefits," the Social Security Administration (SSA) writes on its own website providing background to Flemming v. Nestor, "more so than general federal income taxes can be said to establish 'rights' to certain government services. This is often expressed in the idea that Social Security benefits are 'an earned right.' This is true enough in a moral and political sense. But like all federal entitlement programs, Congress can change the rules regarding eligibility–and it has done so many times over the years. The rules can be made more generous, or they can be made more restrictive. Benefits which are granted at one time can be withdrawn, as for example with student benefits, which were substantially scaled back in the 1983 Amendments. 

"There has been a temptation throughout the program's history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense," the SSA goes on to say before concluding that in Flemming v. Nestor, the Supreme Court rejected that argument "and established the principle that entitlement to Social Security benefits is not a contractual right."

Ephram Nestor, the plaintiff in the case, was a Bulgarian immigrant who came to the United States in 1918, began paying into Social Security when it was established in 1936, and began collecting monthly $55.60 checks when he retired in 1955. 

Then he ran into a problem.  A year after he retired, Nestor was deported for having been a member of the Communist Party. Congress had passed a law the year before he retired, saying that any person deported from the United States would lose Social Security benefits. His checks stopped and he sued, arguing that he was entitled to receive a benefit he had paid in to for 19 years.  The case went all the way to the U.S. Supreme Court, which ruled against him in 1960 in a 5-4 decision.

"Plainly the expectation is that many members of the present productive workforce will in turn become beneficiaries rather than supporters of the program," Justice John M. Harlan II wrote in the majority decision.  "But each worker's benefits, though flowing from the contributions he made to the national economy while actively employed, are not dependent on the degree to which he was called upon to support the system by taxation.  It is apparent that the non-contractual interest of an employee covered by the act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments."

In the dissenting opinion, Justice Hugo Black wrote that if Social Security benefits are not protected by the Fifth Amendment's prohibition of taking private property for public use without just compensation, then "in paying the beneficiaries out of the fund," the government "is merely giving them something for nothing and can stop doing so when it pleases.  This, in my judgement, reveals a complete misunderstanding of the purpose congress and the country had in passing that law.  It was then generally agreed, as it is today, that it is not desirable that aged people think of the government as giving them something for nothing."  

He then went on to quote Senator Walter George, chairman of the senate Finance Committee when the Social Security Act was passed: "Social Security is not a handout; it is not charity; it is not relief.  It is an earned right based upon the contributions and earnings of the individual.  As an earned right, the individual is eligible to receive his benefit in dignity and self-respect."

If that was the intention, it is not the law according to the Supreme Court.  Perhaps it should be.


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