The Supreme Court heard arguments on a potential landmark case Tuesday looking into whether it’s constitutional to deny federal benefits to aging and disabled U.S. citizens living in Puerto Rico, even though they can access them if they live on the mainland.
The justices seemed divided on the issue as they questioned Deputy Solicitor General Curtis Gannon as he argued on behalf of the Department of Justice in favor of excluding Puerto Rican residents from Supplemental Security Income benefits.
These benefits, also known as SSI, are meant to help disabled, older and blind people who struggle financially. They are available to U.S. citizens living in the 50 states, the District of Columbia and the Northern Mariana Islands but not for those who live in the other U.S. territories of Puerto Rico, the U.S. Virgin Islands, Guam and American Samoa.
The issue is being assessed as part of a case involving José Luis Vaello-Madero, 67, a disabled man who lived in New York from 1985 until 2013, when he moved to Puerto Rico to care for his wife. He had begun receiving SSI benefits in 2012, when he was still in New York, until he was told in 2016 that he was ineligible after moving to the island.
A year later, the Social Security Administration filed civil action against him, demanding he pay back over $28,000 in benefits he had received while living in Puerto Rico.
Gannon relied on three key points to push the court to reverse a U.S. Court of Appeals ruling from last year deeming “invalid” the practice of denying SSI benefits to Puerto Rican residents, stating the federal government failed to establish “a rational basis for the exclusion of Puerto Rico residents from SSI coverage.”
One of those points is based on the fact that Puerto Ricans on the island are exempted from most federal taxes, including income tax.
Liberal Justice Sonia Sotomayor, who is of Puerto Rican descent, pushed back, saying that Puerto Ricans "pay as much taxes, other combined taxes, as other states in the union."
Puerto Ricans do pay federal payroll taxes and help fund public programs such as Medicare and Social Security, contributing more than $4 billion annually in federal taxes to the United States.
“It’s nice to sort of cherry-pick one tax, but that’s true around the country,” Sotomayor said. “So, I don’t know how exempting out one or two taxes gets you away from seeing whether the government’s distinction is rational based on the need of the citizens who are supposed to receive the money.”
Differences in taxation limit Puerto Ricans on the island in other ways, including the lack of voting representation in Congress and the inability to vote in U.S. presidential elections, among other restrictions when it comes to accessing federal safety net programs.
Sotomayor added that the SSI program is fully funded by the federal government, meaning that states don't incur any costs when making these benefits available to their residents.
“I don’t understand what the different relationship with Puerto Rico has to do with this program because there’s no cost to the government,” she said. “The money’s going directly to the people, not to the government.”
About 700,000 people living in Puerto Rico would qualify for SSI benefits if the Supreme Court rejects the Justice Department's appeal. That would mean a combined $1.8 billion to $2.4 billion annually for qualified Puerto Rico residents over the decade, according to the Social Security Administration. Nearly 44 percent of Puerto Ricans live in poverty.
The appeal was originally filed by the administration of then-President Donald Trump, a Republican. His Democratic successor, Joe Biden, has continued the appeal, even though he promised to ensure residents of Puerto Rico have access to SSI benefits during his presidential campaign, while also urging Congress to extend SSI to Puerto Rico.
During his appeal, Gannon argued that "Congress often legislates differently" on issues regarding U.S. territories based on a territorial clause written into the Constitution.
A series of Supreme Court rulings, known as the Insular Cases essentially allowed Congress and the federal government to treat U.S. territories as foreign for domestic purposes and states for international purposes, particularly when it comes to funding public programs. They were written by most of the Supreme Court justices who legalized racial segregation under Plessy v. Ferguson.
But the case of Vaello-Madero is now giving the current Supreme Court, which has a 6-3 conservative majority, a chance to revisit such rulings.
“Why shouldn’t we just admit that the Insular Cases were incorrectly decided?” conservative Justice Neil Gorsuch asked Gannon as he pressured him to articulate the Biden administration's position on the cases.
While Gannon didn't defend the reasoning and rhetoric of the Insular Cases, he said "the court doesn't need to say anything else about the Insular Cases in order to decide this case." Instead, he focused on arguing that Congress and the federal government can treat U.S. citizens differently depending on where they live since the constitutional right to equal protection does not include geographic equality.
Treating a U.S. citizen as ‘foreign’
Congress first decided to exclude Puerto Rico from the SSI program when it was enacted in 1972. Instead, Puerto Ricans are eligible for a different government program, called Aid to the Aged, Blind and Disabled. To qualify, people can’t earn more than $65 a month, compared with $750 monthly for SSI. Those who qualify under Puerto Rico’s program get an average benefit of $77 a month, while SSI beneficiaries receive an average of $533 a month.
For Vaello-Madero's lawyer, Hermann Ferré, the issue at the heart of his client's case is "treating a citizen as though they're foreign because they happen to reside in Puerto Rico," adding that even U.S. citizens who aren't of Puerto Rican descent would be treated as foreigners if they move to the island.
Conservative justices such as Brett Kavanaugh wondered about the repercussions of a ruling in favor of Vaello-Madero, including whether other benefits would have to be extended to residents of U.S. territories.
Kavanaugh said Ferré made “compelling policy arguments” but noted that the Constitution's territorial clause may be something “people would want to change” — but that's not the role of the court.