The U.S. Supreme Court heard oral arguments Tuesday on whether it is constitutional to deny Supplemental Security Income benefits to American citizens living in Puerto Rico, and by extension the U.S. Virgin Islands and Guam, under a decades-old decision by Congress.
Representing the U.S. Justice Department, Deputy Solicitor General Curtis Gannon said the intent of the 1972 decision – creating SSI for the states and D.C. only — was to promote economic and political autonomy in Puerto Rico, and that because its residents don’t pay federal income and some other taxes, it can fund its own safety net programs.
That leaves U.S. citizens of most American overseas territories, including the U.S. Virgin Islands, to rely on Aid to the Aged, Blind and Disabled, which in Puerto Rico delivers a benefit of about $58 a month versus $418 if its residents were eligible for SSI.
The case that led to Tuesday’s hearing centers on José Luis Vaello-Madero, whom the U.S. Justice Department sued in 2017 to recover $28,081 in SSI benefits it said he continued to receive illegally when he moved from New York State to Puerto Rico in 2013 to be closer to family.
The DOJ lost its case in the District Court of Puerto Rico, and again on appeal to the U.S. Court of Appeals for the First Circuit in April 2020, which found that barring residents of the territory from SSI payments violates the equal protection clause of the Constitution. The DOJ appealed to the Supreme Court, which granted review of the case in March.
Should Vaello-Madero prevail, Puerto Rico will stand to gain about $2 billion in SSI funding – benefits that could in turn also extend to the U.S. Virgin Islands and Guam.
The justices asked some pointed questions Tuesday as they grappled with whether federal contributions should determine SSI eligibility, and the status of territories versus states. Many questions posed to Gannon came from the three liberal justices: Stephen Breyer, Elena Kagan and, notably, Sonya Sotomayor, whose parents are from Puerto Rico.
“Most of the SSI recipients, if not all of them, don’t pay taxes. So it’s not as if the recipients of this money are any different among themselves. Puerto Ricans are citizens, and the Constitution applies to them. Their needy people are being treated different than the needy people in the 50 states, the District of Columbia, and the Northern Mariana Islands,” said Sotomayor.
“So explain how those people, none of whom pay taxes to the federal government, how are they different,” the justice said.
Because they live in a community where less tax money is going to the federal government, which is distributed through various federal benefit programs, said Gannon.
Sotomayor questioned that argument. “I’m looking at the record, and it shows Puerto Ricans as a community, and all the other taxes they pay, pay more than many states of the union,” she said.
Gannon’s response, that Puerto Ricans pay less per capita than 33 states, and receive benefits under other federal programs, led to questions from Breyer about whether the law is reasonable, rational or arbitrary.
“The rationale is that … it is always appropriate for Congress to take account of the general balance of benefits and burdens associated with a particular federal program. … And when the locality at issue pays in less into that income stream than others do, that means that there is more money left in the community,” thereby promoting autonomy, said Gannon.
Puerto Rico is in fact bankrupt and being run by a federal oversight board under a 2016 statute commonly known as PROMESA — the Puerto Rico Oversight, Management and Economic Stability Act — Breyer said.
“It’s hard to imagine that Puerto Rico has the ability, given that it’s in temporary bankruptcy, to do what you say to be able to raise taxes to help the needy,” said Sotomayor.
Asked by Chief Justice John Roberts how much federal assistance Puerto Rico receives, Gannon replied that on a per capita basis, “Puerto Rico is receiving less back from the federal government than the District and 17 states, but it’s receiving more than 33 other states … so it’s not being treated here as an extreme outlier.”
Sotomayor disagreed. There is a long history of discrimination against Puerto Rico dating back to the Insular Cases, she said, referring to a series of blatantly racist Supreme Court decisions from the turn of the last century that have left America’s territories in unincorporated limbo with no federal political power and no path to statehood.
“Puerto Ricans are Puerto Ricans. They’re Hispanic, and they are routinely denied a political voice. They are powerless politically. All you have to do is listen to some of the rhetoric about Puerto Ricans and you know there has been discrimination shown. Why shouldn’t that add to the scrutiny?” she said.
Because Vaello-Madero was able to receive SSI benefits in New York, but not when he moved to Puerto Rico, eligibility is determined by location, not ethnicity or race, said Gannon – a point that Justice Clarence Thomas raised when the defense took its turn.
“There is no evidence that anyone on the other side has cited that ties this determination in the 1970s about how Puerto Rico would be treated in this benefits program to any of the troubling statements in the Insular Cases from the early 20th century that came from this court. If you thought that that history prevented Congress from drawing any distinctions with respect to the territories, that would be a sea change,” Gannon said.
“Needy is needy, whether on Puerto Rico or in the mainland,” said Sotomayor. “None of the people who receive it on the mainland pay taxes. None of the money is or would go to Puerto Rico for its self-governance. I do think that restrictions have to be rational. … Why one would say that it’s rational to treat a group of people, of citizens, differently from other citizens on the mainland when the need is the same,” she said.
Asked by Justice Amy Coney Barrett whether the First Circuit decision that led to Tuesday’s hearing would require giving not only SSI, but also other benefits to Puerto Ricans, and by extension to other territories that don’t receive them, Gannon said yes.
“Do you have a number on what the implications would be of the First Circuit’s reasoning,” and benefits were extended to Guam and the U.S. Virgin Islands, she asked. Gannon said he did not, but said the amount would be less than the $2 billion cited for Puerto Rico, because the populations are smaller.
The questions for defense counsel Hermann Ferre focused on the treatment of states versus territories, whether the denial of SSI benefits violates the equal protection clause of the Constitution, as the First Circuit upheld, and the role of the Territorial Clause that says Congress can make new states and that it has full power over territories.
“I think the big picture is that the Constitution promised to citizens a republican form of government, and the intention, certainly from … the court’s early cases, was that the problem of a non-republican form of government in the territories was a temporary one which would be resolved as these territories were populated and organized and then became states,” said Ferre.
“That changed with the Insular Cases and has created a system in which populations now are held in an indefinite state of territorial status. So the court essentially blessed the possibility of territories remaining territories in an indefinite state without full participation, without a full seat at the table, if you will,” said Ferre.
“So if I move from Virginia to Puerto Rico … and lose a certain benefit … how could I claim powerlessness? I understand your argument, if you have a life-long resident of Puerto Rico, but you’re saying your arguments also apply to anyone who chooses to locate or relocate to Puerto Rico. And that’s the part I don’t understand, particularly in the context of your powerlessness argument,” said Thomas.
“When the resident from Virginia decides to move to Puerto Rico, they thereby lose the ability to participate in the federal elections that would result in a representative in Congress, representative in the Senate, and also the ability to vote for president and vice president, all of which means that that individual has no representative protecting his or her interest while in Puerto Rico,” Ferre said.
A decision in United States v. Vaello-Madero is not expected until the end of the Supreme Court’s term in June.
The full 78-page transcript of Tuesday’s hearing is available on the Supreme Court website.