Eleanor Finch
The Social Security Act was a massive challenge to put into operation, and the Social Security Board had to start work without knowing whether its actions were constitutional. The Supreme Court's ruling on the Agricultural Adjustment Act (AAA) in 1936 was a major rebuff for the New Deal, but there was a silver lining in the opinion that ultimately sided with Hamilton on the question of a strict or flexible interpretation of the general welfare clause. The 1937 Supreme Court rulings on the Social Security Act were a relief for the Social Security Board, but there have been ongoing questions about whether the Supreme Court could strip protections from millions of federal program beneficiaries.
| Characteristics | Values |
|---|---|
| Social Security Act grant-in-aid programs | Can contain rights enforceable through section 1983 |
| Lower courts' rulings | Unconstitutional |
| Supreme Court's ruling on the AAA | A major rebuff for the New Deal |
| Social Security Act | A massive challenge to put into operation |
| Issuance of SSNs, collection of payroll taxes, and payment of benefits | Had to start by January 1937 |
| Supreme Court decision | Could eliminate safeguards for beneficiaries of public programs |
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What You'll Learn
The Supreme Court's 1937 ruling on the Social Security Act
The 1937 Supreme Court ruling on the Social Security Act was a massive challenge and, in some respects, unprecedented in American history. The Social Security Board had to start work without knowing whether its actions were constitutional. By the time of the court's ruling in May 1937, more than 26 million social security numbers (SSNs) had been issued, around $150,000,000 in taxes had been collected, a dozen or so benefit claims had already been paid, and there were about 150 local field offices in operation around the country.
The Supreme Court's ruling on the Agricultural Adjustment Act (AAA) was a major rebuff for the New Deal. Lower courts ruled this unconstitutional and the Supreme Court followed in January 1936, ruling that "a statutory plan to regulate and control agricultural production, [is] a matter beyond the powers delegated to the federal government". However, the same opinion ultimately sided with Hamilton on the larger question of a strict or flexible interpretation of the general welfare clause by holding that "the power of Congress to authorise expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution".
Justice Stone could then dispose of the third case in short order: "Together the two statutes now before us embody a cooperative legislative effort by state and national governments, for carrying out a public purpose common to both, which neither could fully achieve without the cooperation of the other. The Constitution does not prohibit such cooperation."
Although previous Supreme Court cases had implicitly recognised that Social Security Act grant-in-aid programs can contain rights enforceable through section 1983, the 1994 amendments made this congressional intent explicit. The lower courts have followed these rules in hundreds of decisions, including prohibiting states from unlawfully reducing Medicaid Early and Periodic Screening, Diagnostic and Treatment benefits; barring states from refusing to promptly enrol eligible people into Medicaid; and stopping states from unnecessarily institutionalising beneficiaries who can receive care in less-restrictive settings.
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The Agricultural Adjustment Act (AAA)
The AAA was potentially the most serious threat to the Social Security Act, as lower courts ruled it unconstitutional and the Supreme Court followed in January 1936, ruling that it was a matter beyond the powers delegated to the federal government. The Supreme Court's ruling on the AAA was a major rebuff for the New Deal. However, the same opinion ultimately sided with Hamilton on the larger question of a strict or flexible interpretation of the general welfare clause, holding that the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.
Social Security Act grant-in-aid programs can contain rights enforceable through section 1983, a powerful civil rights law that protects beneficiaries of public programs from public officials' threats of unlawful termination of coverage. When public officials threaten to unlawfully deny or terminate rights guaranteed under public benefit programs (e.g. Medicare, Social Security), people are entitled under law to a review by an independent decision-maker.
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The general welfare clause
The Social Security Act was ruled constitutional by the Supreme Court in 1937. However, the general welfare clause has been a source of controversy.
The United States Constitution contains two references to "the General Welfare", one in the Preamble and the other in the Taxing and Spending Clause. The Supreme Court has held that the mention of the clause in the Preamble is not a source of substantive power for the government.
Justice Story concluded that the General Welfare Clause is not a grant of general legislative power but a qualification on the taxing power, which includes a federal power to spend federal revenues on matters of general interest to the federal government. This interpretation was upheld by the Supreme Court in 1833.
The historical controversy over the General Welfare Clause arises from two distinct disagreements. The first concerns whether the clause grants an independent spending power or is a restriction upon the taxing power. The second disagreement pertains to the exact meaning of the phrase "general welfare."
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The Social Security Board's work before the Supreme Court ruling
The Social Security Act was a massive challenge to put into operation, and in some respects, it was unprecedented in American history. The Social Security Board had to start work before the Supreme Court ruling in May 1937, which meant that it had to issue social security numbers, collect payroll taxes, and pay the first lump-sum benefits without knowing whether its actions were constitutional. By the time of the court's ruling, more than 26 million SSNs had been issued, around $150,000,000 in taxes had been collected, a dozen or so benefit claims had already been paid, and there were about 150 local field offices in operation around the country. The Board also had to hire staff, acquire facilities, and set up record-keeping procedures.
The 1937 Supreme Court ruling on the Social Security Act was a major rebuff for the New Deal. The ruling invalidated the Agricultural Adjustment Act (AAA), which used the same broad power to levy taxes for the general welfare as the basis for its program of agricultural price supports and controls. Lower courts ruled this unconstitutional and the Supreme Court followed in January 1936, ruling that a statutory plan to regulate and control agricultural production was a matter beyond the powers delegated to the federal government. However, the same opinion ultimately sided with Hamilton on the larger question of a strict or flexible interpretation of the general welfare clause. The Supreme Court held that the power of Congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legislative power found in the Constitution.
The Social Security Board breathed a sigh of relief after the 1937 Supreme Court ruling. Justice Stone disposed of the third case in short order, stating that "Together the two statutes now before us embody a cooperative legislative effort by state and national governments, for carrying out a public purpose common to both, which neither could fully achieve without the cooperation of the other. The Constitution does not prohibit such cooperation." This ruling provided a silver lining for the Social Security Board, as it affirmed the constitutionality of their efforts to implement the Social Security Act.
Although the 1937 Supreme Court ruling on the Social Security Act was a significant development, it is important to note that the Supreme Court has continued to play a role in shaping the Social Security program over the years. For example, the 1994 amendments to the Social Security Act explicitly recognised that grant-in-aid programs can contain rights enforceable through section 1983. This has had important implications for protecting the rights of beneficiaries and ensuring that states adhere to their obligations under these programs. More recently, in 2022, the Supreme Court agreed to decide whether people who depend on Medicaid and Medicaid providers should continue to have the safeguard of an independent decision-maker when their rights are threatened. This upcoming decision could have significant implications for the protection of civil rights under public benefit programs.
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The Supreme Court's power to strip protections from federal program beneficiaries
The Supreme Court's rulings on the Social Security Act and the Agricultural Adjustment Act (AAA) in the 1930s set important precedents. The AAA ruling, in particular, dealt a major blow to the New Deal by limiting the federal government's powers. However, it also affirmed a flexible interpretation of the general welfare clause, recognising Congress's broad power to authorise expenditures for public purposes.
While the 1937 rulings did not directly address the constitutionality of social security, they highlighted the potential for the Supreme Court to influence the interpretation and implementation of federal programs. This dynamic was further emphasised by the Supreme Court's 1994 amendments, which explicitly recognised that Social Security Act grant-in-aid programs can contain rights enforceable through section 1983. This provided a legal basis for beneficiaries to challenge unlawful actions by public officials, such as the unlawful denial or termination of rights under programs like Medicare, Social Security, and Medicaid.
Most recently, in May 2022, the Supreme Court agreed to decide on the continued protection of Medicaid beneficiaries and providers under section 1983. This decision has the potential to eliminate a fundamental safeguard for millions of people who depend on public benefit programs. The Supreme Court's power to strip protections from federal program beneficiaries, therefore, remains a critical and evolving aspect of American law, with far-reaching consequences for the country's social safety net.
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Frequently asked questions
Yes, social security is protected by the constitution. However, the Supreme Court could strip protections from millions of federal program beneficiaries.
The Social Security Act was put into operation in 1937. It was a massive challenge and unprecedented in American history.
The Supreme Court has ruled on cases related to social security, including the 1937 rulings on the Social Security Act and the 1994 amendments that made explicit the congressional intent to recognise that Social Security Act grant-in-aid programs can contain rights enforceable through section 1983.
The Supreme Court's rulings on social security can have a significant impact on people's lives. For example, the 1937 rulings on the Social Security Act helped save men and women from the rigors of the poor house. More recently, the Supreme Court's decision to strip protections from federal program beneficiaries could affect millions of people who depend on programs like Medicaid and Medicare.
