Today in Supreme Court History: August 14, 1935

8/14/1935: President Roosevelt signs into law the Social Security Act of 1935. The Supreme Court upheld the constitutionality of this law in Helvering v. Davis (1937).

President Franklin D. Roosevelt

Comments

[Dan Schiavetta]

American Trucking Ass’ns v. Gray, 483 U.S. 1306 (decided August 14, 1987): Blackmun upholds injunction creating escrow for extra taxes paid by truckers who were challenging a new highway equalization tax on Dormant Commerce Clause grounds; Arkansas insisted on collecting taxes anyway, so escrow would keep the extra funds out of the state’s pocket (I remember those stickers saying, “This truck pays $20,000 a year in highway taxes” . . . I wonder if anyone wrote under that “and causes $50,000 a year in wear and tear”) (the truckers ultimately won, sub nom. American Trucking Ass’ns v. Smith, 496 U.S. 167, 1990)

McDaniel v. Sanchez, 448 U.S. 1318 (decided August 14, 1980): Powell stays order requiring county officials to proceed with “preclearance” procedure (the now-illusory §5 of the Voting Rights Act) for new apportionment plan; says Court must decide whether the plan, already approved by the District Court, is “legislative” (requiring preclearance) or “judicial” (not) (the Court ultimately held that the District Court should not have ruled on the plan; it should have been submitted directly to the Attorney General, 452 U.S. 130, 1981)

Stickel v. United States, 76 S.Ct. 1067 (decided August 14, 1956): Harlan denies continuance of bail pending cert approval because cert petition argues a point which appeared only in dicta in the lower court’s decision (trial judge erroneously applied preponderance instead of reasonable doubt standard in denying motion to acquit, but conviction affirmed on grounds that denial was proper even under reasonable doubt standard)

[Krayt]

(I remember those stickers saying, “This truck pays $20,000 a year in highway taxes” . . . I wonder if anyone wrote under that “and causes $50,000 a year in wear and tear”)

I wonder if anyone wrote under that "and brings hundreds of thousands of dollars in benefits to America via economic dynamism as Rome keeps the roads open."

Curious how people analyze only far enough to make a gotcha.

[Mr. Bumble]

When you're as full of shit as capt it's easy to pull stuff out of your ass.

[Martinned2]

I wonder if anyone wrote under that “and brings hundreds of thousands of dollars in benefits to America via economic dynamism as Rome keeps the roads open.”

I wonder if anyone wrote under that "for which the owner of this truck gets to bill his customers hundreds of thousands of dollars".

[Mr. Bumble]

So the truckers should be good citizens and do it for free?

[Martinned2]

No, they should pay the cost of the inputs to their businesses, including the roads.

[Mr. Bumble]

They do by way of licensing and registration fees and motor fuel taxes; just like we all do.

[Magister]

And that likely does not cover the costs of the road inputs. Highlights of a GAO report:

About 22 percent of all loaded tractor-trailers exceed State weight limits, and the percentage ranges as high as 81 percent for other types of trucks. This is significant because a five-axle, tractor-trailer loaded to the 80,000-pound Federal limit, has the same impact on an interstate highway as 9,600 automobiles. In addition, as truck axle weights increase, pavement damage increases an at even faster rate. For example, while a truck axle carrying 18,000 pounds is only 9 times heavier than a 2,000-pound automobile axle, it does 5,000 times more damage.

Based on the miles I drive, the typical mileage of my car, and the gas tax in my state, I pay around $200 per year just from that gas tax. So just based on that and ignoring other taxes that Federal weight limit truck (which is apparently often outweighed) should be paying around $2 million per year, ignoring that it probably drives more miles than I do.

[Frank Drackman]

How do you get places? On a fucking magic carpet?

[Dan Schiavetta]

One of those big rigs causes as much wear and tear as 10,000 cars. My point (actually there are several points to be made here, but let's pick one) is that our love affair with vehicles has been expensive and dirty. For a long time now we should have been using railroads more for carrying freight.

[Jerry B.]

So, a railroad spur to every grocery or retail store?

[Frank Drackman]

Don’t tell the Cap’n (Captain Kangaroo had more sense) about Hawaii, gonna need a long tail line to get there

Frank

[Mr. Bumble]

Wasn't Biden building a bridge to the Pacific?

[Dilan Esper]

I have no comment on the merits decision in Gray, but the shadow docket order seems right. I've always thought the rule that you have to pay your taxes to challenge them, though understandable (you don't want people to dissipate their assets while challenging a tax) also creates bad incentives for the government, because they can use the money while fighting people trying to sue for a refund into the ground until they give up.

So the shadow docket order rights the incentives-- yes, the taxpayer has to pay the tax, but the government doesn't get to access it until it proves it is entitled to the money.

[Magister]

Unless the state is going to go bankrupt in the meantime, it doesn't seem like they would not be able to pay the refund without having escrowed the money; and it's not likely that the tax collected would be specifically used to defend the tax to the extent that the escrow would force them into a less vigorous defense.

[Dilan Esper]

It's more the incentive of litigating substantively incorrect positions on taxation figuring you have the money and the taxpayer may give up.

No, you have to win to get it out of the escrow.

[Magister]

If the taxpayer gives up, what happens to the escrow? The incentives don't seem to change much; either way, the winning taxpayer gets the money back, and either way the state wants to win to get or keep the money. If anything, the state would be incentivized to create additional taxes that aren't contested in the meantime, rather than only after losing, which doesn't seem a huge win for taxpayers in general.

[Frank Drackman]

Who hasn't reached the $168,600 mark where that 12.4% FICA goes away?? (as an Independant Contractor I'm the Employer and Employee, so pay both*, there is still that annoying Medicare Tax that never goes away)
DemoKKKrats have been promising to get rid of the FICA Income cap for years, somehow never happens, maybe not coincidentally everyone in Congress makes more than the limit, (seriously, how does anyone get by on less than $200K now a days?)
* Everyone pays "Both Parts" of FICA/Medicare, it's the Man's way to keep the huddled asses docile, like the Idiots who think an Income Tax Refund is a good thang.

Frank

[Brett Bellmore]

“seriously, how does anyone get by on less than $200K now a days?”

I raise chickens and have a large garden… But mainly, I don't live in an expensive state.

[Frank Drackman]

I have an expensive wife

[ReaderY]

Didn’t Rockefeller once say “Consider the average American making only $100,000 a year?”

[JoeFromtheBronx]

Some info:

https://www.ssa.gov/history/court.html

There was no written dissent in Helvering, just this statement:

"MR. JUSTICE McREYNOLDS and MR. JUSTICE BUTLER are of opinion that the provisions of the act here challenged are repugnant to the Tenth Amendment, and that the decree of the Circuit Court of Appeals should be affirmed."

[Brett Bellmore]

That certainly sounds like a dissent, and, really, what more needed to be said?

[JoeFromtheBronx]

Yes. Why explain why seven justices, in an expansive opinion, were wrong to uphold national legislation passed by people voted in by the nation along with a president who won in a landslide?

Life is so obvious. Just point to the 10th Amendment.

[Mr. Bumble]

...because not withstanding their opinion it was un-Constitutional
as is Obama care.

[Brett Bellmore]

As Mr. Bumble says.

The job of the Court isn't to uphold the popular will, that's the elected branches.

It's to constrain the elected branches to following the Constitution in upholding the popular will. If the Court, too, is guided by elections, you've just given up on having a constitution.

It was 7-2, and likely no prospect of persuading the 7, who knew quite well the arguments against its constitutionality. They had already decided that they were not going to enforce the limitation of Congress' spending power to spending for the general welfare. So the dissent noted their opinion that it violated the 10th amendment, and left it at that.

[JoeFromtheBronx]

The job of the Court isn’t to uphold the popular will, that’s the elected branches.

I didn’t say otherwise. You are talking past me.

My comment is that judges have a duty to explain themselves carefully when they would overturn the popular will.

This is especially the case when there is a strong dissent that provides another way. They should not just say “Oh it’s obvious” like some commenters here might do.

The seven explained why they were enforcing the Constitution. The dissent, as others did before and after without expecting magically to change the majority’s mind, could have refuted them by writing a dissenting opinion analyzing things out.

They chose not to do so. I won’t mind read on why.

[Stupid Government Tricks]

You don't have to read minds, just the 10th.

[JoeFromtheBronx]

Seven justices, including two conservatives (Sutherland, Van Devanter) who opposed major aspects of the New Deal on constitutional grounds, read the 10A & thought otherwise.

[bernard11]

Not the rest of the Constitution? Seems like a strange approach.

[jdgalt1]

You don't have to mind read to be aware that FDR had threatened to pack the Court if it didn't do his bidding.

That is not a legitimate way to amend the Constitution. And the result still needs to be struck down.

[Sarcastr0]

Ah, well then. Better invalidate all SCOTUS decisions of that era as ‘suspicious!’

The switch in time saving nine is well known. Not many propose to overrule cases based on it.

[Michael P]

Why should those seven justices *not* go along with the fascist president implementing national socialist policies?

[Malika]

"Tom is originally a native of Buffalo, NY and a graduate of Canisius College. He earned a Master’s Degree in English from State University of New York College at Buffalo."

Exactly the intellectual heavyweight I'd expect Michael P to rely on for his economic, historical and political science views!

And to head off his whining about appeal to authority or not engaging, it's as if a undergraduate in English wrote it. Take some Mussolini quotes (Mussolini, who, more than even most politicians and dictators, often changed what he said he believed or had done for different audiences) and say "see, that's kinda like what the Roosevelt administration did, look what I just proved!"

You do have to give him more credit than Michael P, who even more lazily says "fascist president" while linking to an article much more hedged: FDR’s Economic Policies Were Closer to the Fascists’ Than His Defenders Will Admit.

[Michael P]

Yes, we already knew you like ad hominem arguments and cannot defend FDR's policies.

[Malika]

Did you go to the Derek Zoolander Center for Kids Who Can't Read Good? I didn't just point out this guy's laughable credentials, I also addressed his "arguments."

[Sarcastr0]

Brett's the leading expert in BrettLaw, which extends throughout US history and is the only true authority. Or at least the only authority he'll listen to.

[Mr. Bumble]

...as opposed to Il Douche law. Cum loaded.

[Sarcastr0]

I take what the law *is* from SCOTUS precedents. Even the ones I don't like. Because that's how our legal institutions work.

I don't take the decisions I don't like and declare them illegitimate and start going off on the REAL Constitutional law.

[Michael P]

Gaslight0 still generally refuses to engage with anyone on the merits.

[Sarcastr0]

Seems like SCOTUS did that almost 90 years ago.

But also Brett cites nothing other than his own authority on the 10A.

Because that's what he does - BrettLaw has no merits to engage with, it's this engineer and Internet commenter who is so confident he confused his opinion with facts.

[Brett Bellmore]

Obviously I had two Supreme court justices and the Circuit court of appeals agreeing with me, so it's not like I'm out in gold fringe territory here. Is it your contention that people aren't allowed to think the Supreme court has made mistakes in the past, even very consequential ones? Or are we only allowed to think that after the Court itself has overturned those mistakes?

Here's the oral argument.

[Mr. Bumble]

...and if the dissenters had written a several hundred page dissent, what difference would it have made? It's not like there is a Really Supreme Court to appeal to.

[Sarcastr0]

It would have made you able to say ‘I agree with the dissent’ and thus have some arguments beyond foot stomping

[jdgalt1]

There are still the Federalist Papers to cite as authority.

[Sarcastr0]

I've heard that one before.
Hamilton is right - the general welfare clause does not create unlimited power to the federal government. Only the power to spend.

[Sarcastr0]

Eh, Madison.

[Sarcastr0]

90 years later? You sure are in gold fringe territory.

You can say the Court was wrong. I sure do! Everyone here has areas where they think the law is an ass.

What is silly is to utterly ignore what the law is and dwell in a land of how the law ought to be, leaving only to cry "illegitimate!" about baseline aspects of our institutional structure and go off into a fictional set of precedents.

To pretend the law is what the law ought to be is 'area man passionate defender of what he believes the Constitution to say.' It's a purely academic conversation masquerading as something with any real world upshot.

[Michael P]

165 years later without the Court overturning it, how far into gold fringe territory is it to say that the Court was wrong in Dred Scott v. Sandford?

[Sarcastr0]

What a weak-ass strawman.

[Michael P]

Your argument is that a precedent being 90 years old makes it robust to criticism. I'm only pointing out that there are older and more obviously wrong precedents that have never been overturned; your argument is bullshit.

[JoeFromtheBronx]

The 13th and 14th Amendments overturned key components of Dred Scott v. Sandford within the decade.

The Supreme Court later held Dred Scott's overall philosophy as to territories was also wrongly decided.

The opinion has largely been "overruled."

[Magister]

A civil war and multiple amendments resolved the matter fairly quickly. Subsequent courts did not explicitly overturn it, maybe because they are only supposed to decide cases and controversies, and how are they going to get a case about the citizenship and freedom of a slave when slavery is abolished?

But it is also true that when precedents get overturned after significant periods of time, like Roe, it may be by the operation of the political process rather than any judicial process.

[Brett Bellmore]

90 years doesn't make a valid argument "gold fringe", Sarcastr0; "Gold fringe" arguments are arguments that were totally frivolous from the start. Not arguments that were prevailing at the circuit court level and getting votes in the Court 90 years ago.

In this case, you've literally got Perkins, one of the key figures in designing Social Security, saying that they couldn't figure out how to draft it so that it would actually be constitutional! Until she talked to one of the Justices who told her how to pull it off to the satisfaction of the Court's majority.

Why didn't drafting it as a tax law occur to them in the first place? Because it wasn't obviously a valid approach! They were actually trying to hew closer to the Constitution than the Court's majority was going to require them to, because the Court had largely given up holding the line anymore, and they hadn't fully realized that yet.

Am I stupid enough to think the Court is going to do to Helvering what the Brown Court did to Slaughterhouse? No, of course not. That level of constitutional fidelity at the Court is DEAD. Too many deviations have been accepted and gotten entrenched for the Court to ever return to a strict enforcement of the Constitution. The most we can expect is a bit of trimming at the margins.

The Constitution as a strictly enforced body of binding law is DEAD. I know that. But just because the Emperor can't be shamed into putting some damned clothes on doesn't mean I'm obligated to admire his robes.

[Sarcastr0]

You have provided NO argument. You just don't like the policy and want to Constitutionalize that, so you do. Because one thing BrettLaw does is align with your priors.

That level of constitutional fidelity at the Court is DEAD. Too many deviations have been accepted and gotten entrenched for the Court to ever return to a strict enforcement of the Constitution.

Gold. Fringe.

[jdgalt1]

Me neither.

[Sarcastr0]

Brett’s not criticizing, he’s just contradicting. Above you can see how he's just an old man yelling at the clouds.

His best authority is this 2-Justice dissent existing. And a massive amount of unearned confidence in his expertise being greater than all those bad faith liars in SCOTUS.

That is where the length of time this opinion has stood is important. If you're going to say SCOTUS lied, at some point you just look like a crank. That point is WELL before 90 years ago.

[Dilan Esper]

BTW, thanks for directing me to that. I had no idea there were any transcripts available for oral arguments going that far back.

[Mark Regan]

And here, I hope, is an oral argument transcript in Steward Machine.

https://lonedissent.org/transcripts/pre-1955/steward-machine-co-v-davis

[F.D. Wolf]

They point to the First Circuit opinion as their "explanation", which they deemed pointless to repeat. It is a dissent "with opinion", and can be contrasted with a typical "dissent without opinion", for example, Justice Butler's dissent in Buck v. Bell (1927), which read, in whole, "Mr. Justice Bustler dissents."

[JoeFromtheBronx]

They explained that "the provisions of the act here challenged are repugnant to the Tenth Amendment."

They said that the "decree of the Circuit Court of Appeals should be affirmed." They did not say "We agree with their reasoning."

Yes, it was a 'statement,' which somewhat more than merely a dissent without an opinion.

[Mark Regan]

The Social Security case in which Justices McReynolds and Butler explained themselves in detail was Steward Machine (1937). McReynolds’ Steward Machine dissent even quoted from a veto message from President Pierce — at length.

Steward Machine approved the unemployment compensation system. Helvering v. Davis approved the insurance system.

[JoeFromtheBronx]

Sutherland dissented in one of the cases, showing the two had differences, at least in his mind.

With respect to McReynolds' judgment, he had his moments, not sure Franklin Pierce is the best option to determine constitutional principle in the 20th Century (or even in the 19th in various ways).

[Mark Regan]

Sutherland's Steward Machine dissent approved of the basic idea of grant-in-aid programs but disapproved of some structural problems with Social Security Act unemployment compensation. Van Devanter joined him.

[Aoidized]

Note that the national election, in 1935, was one of the first where women and many of the Jews and Catholics who immigrated until the spigot was sensibly turned off in 1924 were voting.

That's what turned America into a leftist welfare state.

[Jason Cavanaugh]

Shouldn't you be off in your parent's basement cleaning a loaded gun with your mouth?

[Aoidized]

Shouldn't you be lubing yourself up for LawTalkingGuy and Nova Lawyer's nightly poundings?

[Dilan Esper]

And it's just crazy to argue there's a Tenth Amendment problem with a pure spending program. (I.e., I get there can be problems with the South Dakota v. Dole issue, but that's conditional spending. This is just spending money.)

The Constitution says Congress can spend money to promote the general welfare. That's a textual justification for Social Security if there ever was one!

[Aoidized]

If "general welfare" is to be read broadly enough to cover individual social spending, then why bother having the rest of Article I, Section 8? Why clarify that Congress can create post offices, for example?

Obviously, having post offices promotes the general welfare!

[jb]

It's pretty funny to be arguing that an amendment whose entire point is to say "just because it is not on this list doesn't mean that it's not valid" to somehow mean that in a different part of the Constitution something definitely needs to be on a list to be valid.

[Dilan Esper]

In any event, the post office power is broader than just the power to spend money-- Congress could also override state zoning laws, create rights of way (post roads), override state property laws, etc., all to deliver the mail.

Whereas the spending clause just means they can spend money on it.

[Aoidized]

So what? By your tortured logic, Congress can spend money on social security, but can't set up the SSA to administer the program.

[Aoidized]

No, it's not funny at all. The 10th Amendment is reserving power to the states and people, not the federal government.

[Mr. Bumble]

That's some definition of the "general welfare" you've got there.
A program that collects taxes from those lucky enough to have employment, who if they do so for enough quarters to qualify will receive a stipend if they live long enough to collect it.

[Dilan Esper]

When conservatives don't like the Constitution, they just lie and make up a different Constitution that does what they want.

By any definition of general welfare other than very stupid ones, Social Security promotes it. Indeed probably no program in history promoted it more.

[Mr. Bumble]

“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States” means something different. It means that Congress can collect taxes to pay the debts of the federal government, not those of the states. It means Congress can collect taxes to pay for the defense of the nation as a whole, not the defense of individual states. And most importantly, it means Congress can collect taxes to pay for the general welfare of the United States, not the people or the individual states.
Paul Engel
https://constitutionstudy.com/2018/10/26/general-welfare-clause/

[Sarcastr0]

That's just pure ipse dixit; the text doesn't specify any of that.

[ReaderY]

It’s for Congress to decide what the general welfare of the United States is, isn’t it?

Are you going to make a similar argument about the defense power? -Congress can’t go to war over an individual citizen or vessal or an ally, so the Spanish-American war, World War I, Carter’s attempted hostage rescue in Iran, Desert Shield/Storm, etc. etc. etc. were all unconstitutional?

[jdgalt1]

That is a misconception about the meaning of the general welfare clause. Madison sets it right in Federalist #41:

"Had no other enumeration or definition of the powers of the Congress been found in the Constitution, than the general expressions just cited, the authors of the objection might have had some color for it; though it would have been difficult to find a reason for so awkward a form of describing an authority to legislate in all possible cases. A power to destroy the freedom of the press, the trial by jury, or even to regulate the course of descents, or the forms of conveyances, must be very singularly expressed by the terms "to raise money for the general welfare."

But what color can the objection have, when a specification of the objects alluded to by these general terms immediately follows, and is not even separated by a longer pause than a semicolon? If the different parts of the same instrument ought to be so expounded, as to give meaning to every part which will bear it, shall one part of the same sentence be excluded altogether from a share in the meaning; and shall the more doubtful and indefinite terms be retained in their full extent, and the clear and precise expressions be denied any signification whatsoever? For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars. But the idea of an enumeration of particulars which neither explain nor qualify the general meaning, and can have no other effect than to confound and mislead, is an absurdity, which, as we are reduced to the dilemma of charging either on the authors of the objection or on the authors of the Constitution, we must take the liberty of supposing, had not its origin with the latter.

The objection here is the more extraordinary, as it appears that the language used by the convention is a copy from the articles of Confederation. The objects of the Union among the States, as described in article third, are "their common defense, security of their liberties, and mutual and general welfare." The terms of article eighth are still more identical: "All charges of war and all other expenses that shall be incurred for the common defense or general welfare, and allowed by the United States in Congress, shall be defrayed out of a common treasury," etc. A similar language again occurs in article ninth. Construe either of these articles by the rules which would justify the construction put on the new Constitution, and they vest in the existing Congress a power to legislate in all cases whatsoever. But what would have been thought of that assembly, if, attaching themselves to these general expressions, and disregarding the specifications which ascertain and limit their import, they had exercised an unlimited power of providing for the common defense and general welfare? I appeal to the objectors themselves, whether they would in that case have employed the same reasoning in justification of Congress as they now make use of against the convention. How difficult it is for error to escape its own condemnation!"

[Sarcastr0]

Janky excerpt.

Here is his anti-thesis:

"It has been urged and echoed, that the power "to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States,'' amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare."

No one is arguing that the federal government has an 'unlimited commission to exercise every power.'

You're strawmanning.

[Aoidized]

These liberals think that "general welfare" is limited to social spending, third trimester abortions, and gay buttsex.

[ReaderY]

It has been argued in one of the Idaho abortion cases that Congress’ spending power does not include a power to override state law, so Congress, like any private purchaser, can only spend money within a state on things that are legal in the state.

Ao Congress could not, for example, fund abortions in states where those abortions are illegal. It could not use the spending power to implemwnt bathroom rules in states where those bathroom rules are illegal. It simply couldn’t fund institutions to do things that violate state law.

This would be a considerable narrowing of the way the spending power has currently been interpreted. It has been in past decades been interpreted as essentially a regulatory power, as permitting Uncle Sam to make you an offer you can’t refuse. So, for example. State constitutional amendments prohibiting spending public funds on abortion have been struck down because state officials accepted federal funds with such provisos attached. Rather than finding this acceptance to be in excess of their authority under state law, courts had held essentially that everybody and anybody has the right to accept federal funds regardless of authority, and if they do, every provision that stands in the way of a condition attached to those funds is void.

I’m surprised there haven’t been equivalent cases in private institutioms, where janitors or similar have applied fo federal funds against the explicit decisions of the corporate board of directors and insisted that because someone in the corporation accepted the federal funds on the corporation’s behalf, all contrary decisions of the board of directors are void and the corporation must take the funds and meet their associated conditions.

[Mr. Bumble]

Blackman neglected to add; and so was created the greatest Ponzi scheme the world has ever know.

[Sarcastr0]

Aww yeah. Wrong, needlessly signaling, and politically unsustainable!

I do enjoy when the fringey get so high on their own farts they self-marginalize.

[Aoidized]

It is a ponzi scheme

[F.D. Wolf]

One of the individuals instrumental in the creation of Social Security Act was Frances Perkins, the first female Cabinet secretary, who served as Labor Secretary under Presidents Roosevelt and (briefly) Truman from 1933 to 1945. In October 1962, when she would have been 82 years old, Perkins delivered a speech at Social Security Administration headquarters in Baltimore, which the SSA later published as a booklet entitled "The Roots of Social Security".

The legal committee soon broke into a row because the legal problems were so terrible. The constitutional problem was the greatest one. How could you get around this business of the State-Federal relationships? It seemed that couldn't be done.

We continued to wrangle about it' for days. But one day I went out to tea, although not because I wanted to. In Washington you don't go to parties just because you want to go, you know; you go because you have to go. I had to call upon Mrs. Harlan F. Stone, the wife of the Supreme Court Justice. She was at home on Wednesday afternoons and so about 5:45, which is nearly the end of the day, I went to her house and presented myself. There were a lot of other people there. We went up to the dining room to get a cup of tea, and there I met Mr. Justice Stone who had just come home from the Court and was getting his cup of tea. We greeted each other and sat down and had a little chat.

He said, "How are you getting on?" I said, "All right." And then I said, "Well, you know, we are having big troubles, Mr. Justice, because we don't know in this draft of the Economic Security Act, which we are working on--we are not quite sure, you know, what will be a wise method of establishing this law. It is a very difficult constitutional problem, you know. We are guided by this, that, and the other case." He looked around to see if anyone was listening. Then he put his hand up like this, confidentially, and he said, "The taxing power, my dear, the taxing power. You can do anything under the taxing power."

I didn't question him any further. I went back to my committee and I never told them how I got my great information. As far as they knew, I went out into the wilderness and had a vision.

But, at any rate, I came back and said I was firmly for the taxing power. We weren't going to rig up any curious constitutional relationships. "The taxing power of the United States--you can do anything under it, " said I. And so it proved, did it not?

Of course, some of you don't remember the anxiety with which some of us watched the first case go before the Supreme Court; but it came down absolutely all right. The opinion was written in elaborate, fine social language by Mr. Justice Benjamin Cardozo--not by Mr. Justice Stone--but he voted "Aye" on the matter and we were safe. This is the reason, of course, that we built so strongly on the taxing power and that the whole system of taxation is the basis of the Social Security Act. We tax the aged when they are young; that is, we tax all the young people for the social security system while they are at work; and then when they retire, they are eligible.

The text of the entire speech, including audio clips, is on the SSA website. https://www.ssa.gov/history/perkins5.html

[Mr. Bumble]

[JoeFromtheBronx]

See also:

https://substack.com/inbox/post/147691023

[Michael P]

Yes, the Democrats have a cunning plan to turn Social Security from something that looks like a retirement program into just another payroll tax. They think this will somehow save the program from falling off a demographic cliff.

[Mr. Bumble]

It already fell, just hasn't hit the bottom yet and the anvil hasn't landed on it's head. Beep beep!

[Michael P]

Yeah -- that's a fairly good analogy, with the anvil being of course that taxpayers realize they've finally raised taxes on "the rich" so much that they cannot pretend their next misspending program will be funded by raising those taxes even more, and that they need to reduce Social Security benefits rather than asking each full time worker to pay for one or two retirees.

[Sarcastr0]

The math that Social Security is doomed doesn't work. I hear it all the time in millennial circles, but it's all vibes.

https://jabberwocking.com/fixing-social-security-forever-requires-only-1-5-of-gdp/

Highlights from link:
-Social Security will not "run out of money" in 2035. Current estimates say it will run about 25% short in 2035. That's a big difference, but conservatives can never bring themselves to say it.

-Second, it's not a Ponzi scheme. If you cut off all the babble surrounding it, Social Security is just a standard social welfare program: Taxes go in and pensions go out.

-Third, raising the retirement age saves money but does so mainly on the backs of the poor. Personal accounts are risky, which is why Social Security doesn't use them.

-Social Security is not doomed to an endless spiral of death. It's projected to eventually run annual deficits of about 1.5% of GDP....So to fix it, all we need is reform that eventually adds up to 1.5% of GDP. That's it. Some combination of tax hikes and benefit cuts that come to 1.5% of GDP. That will keep Social Security properly financed forever.

[Dan Schiavetta]

Thanks

[Brett Bellmore]

That's all. 1.5% of GDP when the federal government is currently running a deficit that amounts to 6.3% of the GDP.

Easy peasy.

Sarcastr0, it's not like the SS deficit can be isolated from the over-all deficit. The SS 'trust fund' stopped taking in more than was spent over a decade ago, SS taxes are being supplemented from general revenues. So the SS deficit is merely a component of the overall federal deficit, and that deficit is freaking HUGE.

[Krayt]

The whole point of the trust fund was so the government wouldn't have to do unpalatable choices in the future, like reduce benefits, increase taxes, or borrow more.

But they didn't stuff it into a mattress. They loaned it to themselves, and spent it anyway. When it comes time to draw on it, they have to do the exact things the trust fund was set up to avoid.

If businesses did this sleight of hand, investigations, prosecutions.

[Krayt]

It occurs to me they might as well have skipped that, as they have additional overhead as well as "interest" on the loan, with yet more overhead.

[grb]

Brett Bellmore : “… the overall federal deficit, and that deficit is freaking HUGE.”

Brett talks about the evil of the federal deficit, as he is wont to do. But is this just crude hypocrisy? Let’s test and find out:

We have two presidential candidates and both pander, as everyone running for office does. Yet there’s a massive difference of degree. One candidate's promises tally well over a trillion dollars of additional red ink per year. His pledges would be an atomic bomb of debt. His opponent offers nothing remotely close.

So does Brett support the pro-debt candidate? Of course he does. And this isn’t anything new. We are the same age & have voted in the same presidential elections. During that period, it is safe to assert he always voted pro-federal deficit. Without fail, his candidates pledged humongous tax cuts without a hint of any offsetting hikes or cuts. And just as that gooey donut goes straight to the flab around your waist, those cuts were pure debt.

Brett never cared then. He didn’t care in ’16, when Trump battled other GOP primary aspirants over who could pander in higher multi-trillion dollar numbers. He doesn’t care now, when Trump promises an explosion of debt.

But my how he loves to do the Deficits Bad shtick! If we had a nickel every time he gave that pious speech, we might be able to put a dent in the federal shortfall…

[Aoidized]

Complete bullshit. While Trump is certainly no fiscal conservative, Biden/Harris and the rest of the modern Democrats are 100 times worse.

And the reason that very few Republican fiscal conservative are left? Because the American people will always vote for the deficit spender. People love their free gubmint cheese.

[grb]

Aoidized : “Complete bullshit”

Only in your fantasy world of empty talking points. Back on the planet Earth, Democrats have a much better record on federal deficits going back fifty years. Reagan/Bush exploded the deficit; Bill Clinton balanced the budget. Gore ran on fiscal restraint but W won and buried the country in debt as a result. Along with his GOP allies, he sabotaged every single hard-fought compromise and sacrifice needed to get a balanced budget.

Obama faced a 1.5 trillion dollar deficit projection the day he took office, but cut that down year by year while in office. And when there were bipartisan negotiations over the Sequester and debt reduction, it was Obama pushing a much larger deficit reduction package than Boehner could stomach. The president was willing to compromise for the good of the country; Republicans weren’t.

And then there is Trump. Handed a yearly defict laboriously cut to a fraction of the plus-trillion number Obama inherited & given a booming economy, Trump soon was running deficts over a trillion dollars during an economic expansion. That would be impossible except for the gross fiscal irresponsiblity common to post-Reagan Republicans.

I make no claims for Biden, but we’re already back doing the same dance. Trump is making promises worth trillions and trillions in debt – just as we’ve consistantly seen from the Right this past half-century.

You see, Aoidized, back in the real world with real numbers (where 2+2=4), you’re 100% full of shit.

[Dan Schiavetta]

Thanks for reminding everyone of that history.

[Aoidized]

Bullshit. Obama did not give Trump a booming economy. He gave him an artificially juiced ZIRP economy, for too many years.

It wasn't the Republicans that passed Obamacare on a party line vote. It wasn't the Republicans who voted for the $2 trillion wasteful March 2021 "stimulus" bill.

It isn't the Republicans who are hellbent on filling America with low-skill third world peasants who, along with their anchor baby citizen progeny, need trillions in support.

[grb]

Aoidized : “Bullshit”

Yet every point you make is ahistorical nonsense. The booming economy Trump inherited was a booming economy, but that doesn’t count somehow because fever-dream reasons. And you’re confusing the ACA with W Bush’s new drug benefit. The former was scored as fully paid-for by the CBO; the latter was financed wholly by debt.

Trust a right-wing troll to be oblivious to the difference. And even when you abandon trying for substance – stomach-churning racism being more in your comfort zone – you still can’t help tripping over facts. Go check any economist on the economic value of immigrants, both legal & illegal. You’ll quickly find they’re judged an economic & budgetary plus, not deficit.

But all that is from the world of Facts, where right-wingers choke on the air & are poisoned by the water. They can only live in the world of Fantasy, where their reality-TV politicians provide them with pro-wrestling-style entertainment they demand.

[Aoidized]

Firstly, the CBO estimates are always politicized bullshit, and you know it.

Secondly, low skill immigrants do not add economic value. The studies showing they do exclude the cost of educating their anchor baby children, on the grounds that they're not immigrants. But that's a sleight of hand.

[Sarcastr0]

it’s not like the SS deficit can be isolated from the over-all deficit

Take it up with the GOP who has been arguing it's bankrupt for ages.

I would agree with you that it's an entitlements program. I would not agree with you that our debt is just like personal debt and we should do austerity.

[Sarcastr0]

Brett, you ignore the possibility of reindexing or taxes or benefit cuts. 1.5% of GDP is well within the envelope of policymaking.

You just love to talk about deficits even though you're well beyond any actual economics on them.

Trump's no taxes on social security and tips are extending the tax cut and the 5K child tax credit are well in excess of 1.5% of the GDP.

You’re just wrong on the scale being untenable.

[Brett Bellmore]

I qualify for full social security late next year, so it's not like I'm ignoring those. I fully expect benefit cuts, and I'd already be drawing SS if they hadn't been gradually raising the retirement age. (I'd already be comfortably retired without relying on a government check if they'd just let me keep my own damned money!)

I'm saying your confidence that 'minor' adjustments amounting to 'only' 1.5% of GDP are within the envelope of policy making is fatuous, because SS is not a problem that can be isolated from the general trend of the federal government to keep running ever larger deficits, and the very fact that we haven't solved that problem yet demonstrates how big a gap there is between the envelope of policy making and the actual scale of the problem.

[Sarcastr0]

Your previous comment? The one about debt debt debt? It sure did ignore those.

YOU may want the narrative to be about government spending too much generally. But that doesn't mean your subject change is something I need to go along with.

[bernard11]

Brett,

May I point out that neither benefit cuts not tax increases will increase the deficit?

[Michael P]

If we stopped levying income tax on Social Security benefits, that would increase the deficit. You can’t take credit for the current state of affairs towards reducing the 2.4%-of-GDP shortfall.

Similarly, the child tax credit is currently $2000/child under the age of 17. If we include 17-year-olds and ignore the income cap on claiming the CTC, there were something like 74 million children in the US in 2023, resulting in under $150B of child tax credits. That’s less than a quarter of the long-term Social Security shortfall.

[Michael P]

It “runs out” of money in the so-called trust fund, meaning that by the mid 2030s we will either need to cut benefits or jack up taxes.

And it’s not a 1.5% eventual deficit — it’s a 1.7% deficit over the next 75 years, getting worse over time. From https://www.cbo.gov/publication/59340:

CBO projects that if Social Security paid benefits as scheduled, spending on the program would increase from 5.2 percent of gross domestic product (GDP) in 2023 to 7.0 percent in 2097; that increase is attributable to the increase in the average age of the population. Revenues would remain around 4.6 percent of GDP over the same period.

That 2.4% gap between scheduled benefits and revenues would be comparable to $650B out of 2023’s GDP of $27360B. That’s $650B/year in current dollars.

The only one proving their innumeracy here is you, Gaslight0.

[Aoidized]

And these rosy optimistic numbers don't account for negative demographic and productivity changes in our economy.

[Sarcastr0]

I'm not sure you understood the article I linked at all.

[Michael P]

I understood it fine. It’s just wrong. It’s based on old numbers and it excludes the disability insurance part of Social Security, to name a couple of flaws that you might understand.

[Bob from Ohio]

"Mrs. Harlan F. Stone, the wife of the Supreme Court Justice. She was at home on Wednesday afternoons"

A window to past society practices in DC when wives [mainly] held "calling hours" where other wives and often their big shot husbands came calling on designated days, and light refreshments were served. You might stop briefly at several of these informal gatherings.

The fact that Perkins was a big shot as a woman was the beginning of the end of this quaint custom.

[Michael P]

Fortunately the Washington Poo is here to tell us about an immature person who thinks walking to DC will somehow legitimize an unspecified point about Social Security, possibly by way of getting a partisan rag to write a meandering fluff piece about his life story rather than about his specific policy goals.

https://www.washingtonpost.com/dc-md-va/2024/08/14/lubbock-dc-walk/

[Martinned2]

Taking Sacastro's point about "the law is whatever the Supreme Court says it is", if I had to approach the issue from first principles I'm not sure if I'd agree that there is a free-standing power to spend money "for the general welfare".

The way Helvering v. Davis (and Steward Machine Co. v. Davis) get there seems to involve significant trickery with citations.

Congress may spend money in aid of the "general welfare." Constitution, Art. I, section 8; United States v. Butler, 297 U. S. 1, 297 U. S. 65; Steward Machine Co. v. Davis, supra. There have been great statesmen in our history who have stood for other views. We will not resurrect the contest. It is now settled by decision.

If you go back to read what it says in US v. Butler, you find it was a case about the taxing power. It is true that the Supreme Court in Butler found that "The power to appropriate money from the Treasury (Constitution, Art. I, § 9, cl. 7) is as broad as the power to tax" (quoting the syllabus for convenience), but I'm not sure that that statement wasn't obiter, and in any case I'm not convinced that it was right as a matter of first impression.

If pressed, I would have probably argued that "the general welfare" should be construed based on an "ejusdem generis" logic, given that it's right next to "common defence". This would mean that "general welfare" should be contrasted with the welfare of specific people, which is exactly what social security is about.

Alternatively, I might have also been persuadable that the spending power isn't a free-standing power at all, but that Congress can only spend money on the things that the Constitution otherwise authorises it to do, such as establishing post offices, constitute courts, raise and support armies, etc.

Either way, the question is mostly academic, because if social security had been struck down there's a very high probability that it would have been authorised by constitutional amendment subsequently. But it's also possible that the US would have ended up much more decentralised, which wouldn't have been a bad outcome either. Let the Trumpists pay for their own social security.

[Martinned2]

Helvering: https://supreme.justia.com/cases/federal/us/301/619/

Steward Machine (decided on the same day): https://supreme.justia.com/cases/federal/us/301/548/

Butler: https://supreme.justia.com/cases/federal/us/297/1/

[Mr. Bumble]

" Let the Trumpists pay for their own social security."
Be happy to but there is no opt out provision.

[Martinned2]

That's what state-level social security would have given you. (Sort of.)

[JoeFromtheBronx]

A link to the oral argument is found above.

Some opinion reports provide summaries of the arguments of counsel. One for this case is found here:

https://tile.loc.gov/storage-services/service/ll/usrep/usrep301/usrep301619/usrep301619.pdf

[Library of Congress]