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SCOTUS Holds Exclusion of SSI Benefits to Puerto Rico is Constitutional

Updated: Dec 1, 2023

US Federal Court
US Federal Court

On April 21, the U.S. Supreme Court issued an 8-1 decision in United States v. Vaello Madero, 596 U.S. ___ (2022), reversing the judgments of the First Circuit Court of Appeals and the District Court of Puerto Rico and holding that the Constitution does not require Congress to extend SSI benefits to residents of Puerto Rico. Justice Kavanaugh delivered the Court’s opinion, in which Chief Justice Roberts and Justices Thomas, Breyer, Alito, Kagan, Gorsuch, and Barrett joined. Justices Thomas and Gorsuch also wrote separate concurring opinions and Justice Sotomayor filed a dissenting opinion.

Relying on the Court’s precedents in Califano v. Torres, 435 U.S. 1 (1978), and Harris v. Rosario, 446 U.S. 651 (1980), the Court explained 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.”

Applying the deferential rational-basis test, the Court held 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. See Torres, 435 U. S., at 5, n. 7; Rosario, 446 U. S., at 652. In devising tax and benefits programs, it is reasonable for Congress to take account of the general balance of benefits to and burdens on the residents of Puerto Rico. In doing so, Congress need not conduct a dollar-to-dollar comparison of how its tax and benefits programs apply in the States as compared to the Territories, either at the individual or collective level. See Torres, 435 U. S., at 3–5, and n. 7; Rosario, 446 U. S., at 652. Congress need only have a rational basis for its tax and benefits programs. Congress has satisfied that requirement here.”

The Court’s decision was also influenced by the “potentially far-reaching consequences” of requiring Congress to extend SSI benefits to Puerto Rico. “For one, Congress would presumably need to extend not just Supplemental Security Income but also many other federal benefits programs to residents of the Territories in the same way that those programs cover residents of the States. 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 Court noted that the Constitution affords Congress broad discretion over how to structure federal tax and benefits programs for residents of the U.S. Territories, which would allow Congress to extend SSI benefits to Puerto Rico residents. However, the Constitution does not require Congress to extend SSI program to residents of Puerto Rico. While President Biden supported such legislation as a matter of policy and it was included in the Build Back Better bill, given the Court’s decision, this proposal would now be scored with a high cost, where before it was considered “current law” (because it was the ruling of the First Circuit and had not yet been overturned) and thus incorporating it into the bill added no additional costs to the score.

Justice Thomas issued a concurring opinion, writing “separately to address the premise that the Due Process Clause of the Fifth Amendment contains an equal protection component whose substance is ‘precisely the same’ as the Equal Protection Clause of the Fourteenth Amendment.” According to Justice Thomas, “the text and history of the Fifth Amendment’s Due Process Clause provide limited support for reading into that provision an equal protection guarantee.” But, “[e]ven if the Due Process Clause has no equal protection component, the Constitution may still prohibit the Federal Government from discriminating on the basis of race, at least with respect to civil rights.”

Justice Gorsuch also issued a concurring opinion, writing to “acknowledge the gravity” of the Court’s holdings in the Insular Cases, which held that the federal government could rule Puerto Rico and other Territories largely without regard to the Constitution and rest on a “rotten foundation.” According to Justice Gorsuch, “[t]he Insular Cases have no foundation in the Constitution and rest instead on racial stereotypes,” and therefore “deserve no place in our law.”

Justice Sotomayor dissented, explaining that, in her view, “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.”

NOSSCR – APRIL 2022, Volume 44, Number 4

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