Thu 04/21/2022 17:17 PM
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Opinion

The U.S. Supreme Court’s 8-to-1 ruling today finding that it is not unconstitutional to exclude Puerto Rico residents from the Social Security disability program, or SSI, kicks the issue back to the U.S. Congress, where legislation to extend the program to Puerto Rico and other territories has been pending before the U.S. Senate.

The Supreme Court opinion in the U.S. v. Vaello-Madero case overturns the U.S. Court of Appeals for the First Circuit’s April 2020 opinion holding that the categorical exclusion of Puerto Rico residents from the SSI program is unconstitutional because it violates the Constitution’s Equal Protection Clause. In seeking Supreme Court review of the case, the United States had warned that the First Circuit decision threatens to impose billions of dollars in costs on the U.S. government and could affect numerous other acts of Congress that treat Puerto Rico differently from the states and the District of Columbia for purposes of federal benefits programs.

U.S. vs. Vaello-Madero involved José Vaello-Madero, a New York resident from 1985 to 2013, who continued to collect SSI benefits after moving to Puerto Rico despite the loss of his eligibility for the program. The U.S. government initiated proceedings to collect $28,081 in overpaid SSI benefits after he moved to Puerto Rico, and in response Vaello-Madero filed his equal-protection complaint.

The court’s majority opinion was written by Justice Brett Kavanaugh, with Justice Clarence Thomas and Justice Neil Gorsuch filing concurring opinions and Justice Sonia Sotamayor dissenting. The majority finds that Supreme Court precedent, the constitutional text and historical practice “establish that Congress may distinguish the Territories from the States in tax and benefits programs such as Supplemental Security Income, so long as Congress has a rational basis for doing so.”

The opinion notes the importance of the Constitution’s Territory Clause in the case as it “affords Congress broad authority to legislate with respect to the U. S. Territories” and finds that the “deferential rational-basis test” applies to this case. Further, the court finds the Califano v. Torres and Harris v. Rosario cases serve as precedents that “dictate the result here.” The court notes that “Puerto Rico’s tax status - in particular, the fact that residents of Puerto Rico are typically exempt from most federal income, gift, estate, and excise taxes - supplies a rational basis for likewise distinguishing residents of Puerto Rico from residents of the States for purposes of the Supplemental Security Income benefits program.”

The court warns that “Vaello Madero’s contrary position would usher in potentially far-reaching consequences, with serious implications for the Puerto Rican people and the Puerto Rican economy. The Constitution does not require that extreme outcome.” The “potentially far-reaching consequences” of upholding Vaello-Madero’s position include Congress needing to extend not just the SSI program, but many other federal benefits programs, to residents of the territories in the same way those programs cover residents of the states, the opinion explains.

“And if this Court were to require identical treatment on the benefits side, residents of the States could presumably insist that federal taxes be imposed on residents of Puerto Rico and other Territories in the same way that those taxes are imposed on residents of the States. Doing that, however, would inflict significant new financial burdens on residents of Puerto Rico, with serious implications for the Puerto Rican people and the Puerto Rican economy. The Constitution does not require that extreme outcome,” the opinion states.

The opinion says the Constitution affords Congress “substantial discretion” over how to structure federal tax and benefits programs, and that would allow it to extend the SSI program for residents of the territories, but it notes that the “limited question” before the court is whether, under the Constitution, Congress must extend SSI to Puerto Rico residents to the same extent as residents of the states. “The answer is no. We therefore reverse the judgment of the U. S. Court of Appeals for the First Circuit,” the opinion concludes.

Dissenting and Concurring Opinions

In a dissenting opinion, Justice Sonia Sotomayor finds that “there is no rational basis for Congress to treat needy citizens living anywhere in the United States so differently from others. To hold otherwise, as the Court does, is irrational and antithetical to the very nature of the SSI program and the equal protection of citizens guaranteed by the Constitution.”

Justice Sotomayor notes that while it might be reasonable for Congress to take account of the “general balance of benefits to and burdens on” citizens when deciding eligibility for benefits, it is not a rational classification for SSI because it is a “means-tested program of last resort for the poorest Americans who lack the means even to pay taxes.”

The dissent asserts that “[e]qual treatment of citizens should not be left to the vagaries of the political process” and says that because Puerto Rico residents lack voting representation in Congress, “they cannot rely on their elected representatives to remedy the punishing disparities suffered by citizen residents of Puerto Rico under Congress’ unequal treatment.”

“The Constitution permits Congress to ‘make all needful Rules and Regulations’ respecting the Territories. … That constitutional command does not permit Congress to ignore the equally weighty constitutional command that it treats United States citizens equally,” Justice Sotomayor concludes.

Justice Thomas published a concurrence that addressed whether the Due Process Clause of the Fifth Amendment contains an equal protection component with the same substance as the 14th Amendment’s Equal Protection Clause. Justice Thomas expresses doubt that such a reading “comports with the original meaning of the Constitution” and asserts that “[f]irmer ground for prohibiting the Federal Government from discriminating on the basis of race, at least with respect to civil rights, may well be found in the Fourteenth Amendment’s Citizenship Clause.”

Justice Neil Gorsuch, meanwhile, focuses his concurring opinion on the so-called Insular Cases, a series of U.S. Supreme Court decisions from 1901 that established the “doctrine of territorial incorporation.”

“A century ago in the Insular Cases, this Court held that the federal government could rule Puerto Rico and other Territories largely without regard to the Constitution. It is past time to acknowledge the gravity of this error and admit what we know to be true: The Insular Cases have no foundation in the Constitution and rest instead on racial stereotypes. They deserve no place in our law,” Justice Gorsuch states.

Justice Gorsuch said the Vaello-Madero case only “defers a long overdue reckoning” regarding the Insular Cases because both parties in the litigation work from a shared premise that the equal protection guarantee claim is a “fundamental” feature of the Constitution that applies to “unincorporated” territories like Puerto Rico.

“Proceeding on the parties’ shared premise, the Justice applies the Constitution and holds that the conduct challenged here does not offend its terms. “All that may obviate the necessity of overruling the Insular Cases today. But it should not obscure what we know to be true about their errors, and in an appropriate case I hope the Court will soon recognize that the Constitution’s application should never turn on a governmental concession or the misguided framework of the Insular Cases,” Justice Gorsuch notes.

Commonwealth Officials React

In a statement, Gov. Pedro Pierluisi said the Supreme Court decision “proves once more that the territorial condition of Puerto Rico is discriminatory against the American citizens on the island and allows Congress to do with us at it wishes. Clearly our people, particularly the most vulnerable, suffer the consequences.”

The governor said Puerto Rico residents are treated differently than residents of the 50 states in other important federal health and nutritional assistance programs in addition to SSI. “Enough with the colonial status that discriminates against us and affects our quality of life. The only solution is statehood,” the governor said.

Meanwhile, Resident Commissioner Jenniffer González Colón said the Supreme Court decision confirms that the “Territorial Clause allows Congress to exclude us from such an important social program to combat poverty” as SSI.

Calling SSI “one of the most important and effective federal programs for lifting the extremely poor out of that condition,” González urged members of Congress “to act quickly to correct this outrageous discrimination that keeps more than 300,000 of our most vulnerable citizens in extreme poverty.”

In a statement, U.S. Natural Resources Committee Chair Raúl M. Grijalva, D-Ariz., criticized the Supreme Court decision, saying it “upholds more than a century of discriminatory policies that treat our fellow Americans living in the U.S. Territories like second-class citizens.” Grijalva added he is “equally disappointed” in the administration of President Joe Biden for its decision “to defend this discrimination in court.”

Biden’s proposed $1.85 billion Build Back Better Act would extend SSI to Puerto Rico and other U.S. territories effective Jan. 1, 2024. The legislation was approved by the U.S. House of Representatives in November 2021 but has stalled in the U.S. Senate. González has also sponsored stand-alone legislation to extend SSI to Puerto Rico.

While Biden supports expanding SSI to the territories, he has called on Congress to legislate that extension. During oral arguments before the Supreme Court in November 2021, the U.S. Department of Justice under the Biden administration defended as constitutional the ability of Congress to exclude residents of the territory from the program.

Expanding SSI to Puerto Rico will cost about $2 billion annually and $23 billion over the next decade, according to U.S. government estimates.
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