SSI ruling could be boon for Puerto Rico’s economy

Almost two dozen amicus briefs have been filed with the U.S. Supreme Court in the past 10 days in favor of granting Supplemental Security Income benefits to Puerto Ricans and other territorial residents, with oral arguments set for Nov. 8.

Providing the payments would mean an additional $1 billion in federal transfers to Puerto Ricans each year, which could help the Island’s economy, the Puerto Rico Oversight Board has said.

The U.S. Court of Appeals for the First Circuit ruled in April 2020 the prevailing practice of denying the benefits was unconstitutional, and the U.S. Justice Department asked the High Court to review the case, and it accepted.

President Biden supports giving SSI to Puerto Ricans but disagreed with the First Circuit’s ruling that the federal government is obligated to do so.

Since Sept. 2 there have been 22 amicus briefs filed with the Court, 19 alone on Sept. 7. A total of 24 amicus briefs were filed in the case with all but one or two favoring upholding the First Circuit decision.

Briefs were filed by Puerto Rico’s government, the AARP, Puerto Rico Resident Commissioner Jenniffer González Colón, the National Disability Rights Network, the American Civil Liberties Union, the American Bar Association, U.S. Virgin Islands’ government, and United Latin American Citizens and others.

Experts said the number of briefs filed was common. “It’s not unusual these days in cases with high stakes and potentially broad implications to see 20 or more amicus briefs filed,” said Rick Pildes, New York University Sadler Family Professor of Constitutional Law.

“It’s not that surprising that these amicus briefs largely come in to support needy Puerto Ricans who are seeking to receive greater benefits via the SSI program,” Pildes said. “The United States defends the public fisc, but there are not groups that want to spend political capital doing the same.”

The lawsuit involves José Luis Vaello Madero, who began receiving SSI disability benefits while living in New York State. He continued to receive them after moving back to his native Puerto Rico in July 2013.

The federal government sued him in August 2017 seeking restitution of $28,081 in SSI benefits it said it had paid him from August 2013 to August 2016, when he was living in Puerto Rico.

Vaello Madero filed a lawsuit challenging the constitutionality of the federal law that excludes residents of Puerto Rico from SSI while including U.S. citizens living in another U.S. territory, the Commonwealth of the Northern Mariana Islands. U.S. citizens living in three other territories — American Samoa, Guam, and the U.S. Virgin Islands — are also excluded.

Experts disagreed on whether the Supreme Court would overrule the lower court. Law professor Paul Schiff Berman said he thought the high court would do so. Berman, who is Walter S. Cox Professor of Law at George Washington Law School, said Supreme Court rulings from 1978 and 1980 indicated the federal government does not need to extend equal benefits to Puerto Rican residents.

On the other hand, law professor David Super said the large number of amicus briefs indicated the legal framework under which the U.S. tried to retract benefits from Vaello Madero “is incoherent and easy to attack.”

The federal “government’s position can be traced to The Insular Cases,” said Super, who is Carmack Waterhouse Professor of Law and Economics at Georgetown University Law Center. “These were a series of cases, most decided in the very early 20th century, that held that the U.S. Constitution sometimes, but only sometimes, applies to U.S. territories,” Super said. “Even with respect to the same provision of the Constitution, the Court allowed inconsistent results. That approach is very difficult to defend with a straight face.

“In addition, much of the justification was that lands were in the status of territories only for a very brief period before either becoming independent nations or being admitted as states,” Super said. “That might work for the Philippines and Hawaii (both subjects of some of The Insular Cases), which ceased being territories, but the five territories we have now, have been in that status for a very long time and show no prospect of changing status any time soon.

“Telling a people that we will neither protect their civil liberties ourselves now allow them to do it for themselves is very difficult to reconcile with the principles on which this country stands.”

However, Super said it was possible the court may rule for Vaello Madero without ruling on any of the more difficult or systemic issues in the case.

In its May 2020 fiscal plan for Puerto Rico, the Puerto Rico Oversight Board said of the First Circuit decision, “The court’s finding is consequential, but the path forward is highly uncertain.”

“If SSI benefits were ultimately extended to eligible residents of Puerto Rico, initial analysis suggests that it could provide over $1 billion in incremental annual federal transfers to Puerto Rico,” the board continued. “This amount would undoubtedly be welcome support to qualifying residents across the island and could enable some level of increased consumption. The ultimate economic impact of these transfers is unclear, however, and will be examined in future fiscal plans.”

The board’s 2021 fiscal plan did not mention the case.