[FONT=Times New Roman, Times, serif]Nestor appointed his wife and an attorney to represent him, and in May 1958, filed suit in the U.S. District Court for the District of Columbia, alleging that the benefit suspension was illegal and unconstitutional. He argued that "throughout the history of the Social Security Act, old age insurance benefits have been referred to as a right of the recipient which he has earned and paid for." He cited remarks by such politicians as President Eisenhower and Senators Eugene Millikin and Walter George, "all of which," the government's appeal noted, "in effect state that Social Security benefits are not charity or a 'hand-out,' but rather are paid to the recipient as an earned right" and linked partly to his earnings. Nestor also reasoned that his benefits "were, in fact, earned through his work and are assured as a matter of statutory right." In short, he was asking Social Security to stand by its advertising.[/FONT]
[FONT=Times New Roman, Times, serif]Nestor won in the District Court, which ruled that his benefit termination had deprived him of a "property right" which had "fully accrued" to him.
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[FONT=Times New Roman, Times, serif]Since the core issue was whether Nestor had been denied due process by being shorn of a "fully accrued property right" – that is, "the right to the continued receipt of social security benefits once they have been awarded" – the government understandably devoted much effort to arguing that "this view that such benefits are 'fully accrued property rights' is wholly erroneous."[/FONT]
[FONT=Times New Roman, Times, serif]For one thing, the Supreme Court had frequently distinguished between insurance and annuity programs, which create property rights, and pensions, which, being gratuities, do not. It had ruled that when Congress granted pension benefits, it didn't create vested rights; Congress could, if it chose, withdraw benefits conferred by gratuities. It had also ruled that pensions were gifts, not vested rights. Citing these precedents, the brief maintained that "the right to federal social security benefits is a statutory, conditional right, which the possessor enjoys subject to all the conditions which Congress has attached and may attach."[/FONT]
[FONT=Times New Roman, Times, serif]The brief summed up: " . . . social security must be viewed as a welfare instrument to which legal concepts of 'insurance,' 'property,' 'vested rights,' 'annuities,' etc., can be applied only at the risk of a serious distortion of language." Understanding the difficulties of Social Security policymaking "will be obscured by Procrustean efforts to force the social security program into the mold of inappropriate analogies."[/FONT]
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[FONT=Times New Roman, Times, serif]Harlan was right, obviously. Social Security has no contract. It is welfare, not insurance. The original money-back guarantee had been removed in 1939. And the benefit cuts enacted in 1983 (gradually raised retirement age, benefit taxation, gradual cuts in the early retirement benefit) are further proof that one in fact has no real property rights.[/FONT]
[FONT=Times New Roman, Times, serif]So there you are: you have no accrued, vested property right to benefits, and you shouldn't, because your Uncle Sam just simply can't tie his hands by giving you real property rights. He has to be free to shaft you if he has a "rational justification" for it, such as averting national bankruptcy when the retiring baby boomers cause the Treasury to bleed to death. (If that isn't a "rational justification" for benefit cuts, it's hard to see what would be.) He has to have that freedom, so he does. If you were born after 1945, Uncle is going to cut your benefits. Mine too.[/FONT]
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[FONT=Times New Roman, Times, serif]Does anybody really think Social Security will pay everybody all benefits mandated by current law under such circumstances, which will keep getting worse as tens of millions of us baby boomers flood the beneficiary rolls?
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[FONT=Times New Roman, Times, serif]The projected cost of Social Security benefits under current law for 2025 is almost $2 trillion (about $1 trillion in 2003 dollars); for 2045 it's $5.2 trillion ($1.5 trillion 2003 dollars). Do you really think workers are going to cough up trillions in taxes every year for Social Security alone? Don't be silly. Uncle will cut our benefits. He'll have to. And he has all the legal cover he needs to do it. If you think you can stop him with a lawsuit, remember Ephram Nestor. He thought so too.[/FONT]
He's an idiot. SS is not welfare, it is a return of money taken out of your paycheck.
