Flemming v. Nestor
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Flemming v. Nestor, 363 U.S. 603 (1960), is a Supreme Court Case in which the Court upheld the Constitutionality of Section 1104 of the 1935 Social Security Act. In this Section, Congress reserved to itself the power to amend and revise the schedule of benefits.
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[edit] Facts
Nestor challenged this Section after he was denied benefits as a deported member of the Communist Party. He argued that a contract existed between himself and the US government since he had paid into the system for 19 years.
Nestor, an alien, became eligible for Social Security benefits in 1955. In July 1956 he was deported for having been a member of the Communist Party from 1933 to 1939. Section 202(n) of the Social Security Act provided for the termination of social security benefits when an alien is deported for being a member of the Communist Party.
[edit] Result
The Court ruled that no such contract exists, and that there is no contract right to receive Social Security payments. Payments due under Social Security are not “property” rights and are not protected by the Takings Clause of the Fifth Amendment. The interest of a beneficiary of Social Security is protected only by the Due Process Clause.
Under Due Process Clause analysis, government action is valid unless it is patently arbitrary and utterly lacking in rational justification. This provision of §202(n) is not irrational; it could have been justified by the desire to increase the purchasing power of those living in America, because those living in abroad would not spend their payments here.
[edit] Critique
This case goes to the heart of an interesting question: What is property? The Takings Clause of the Fifth Amendment states that "nor shall private property be taken for public use without just compensation." In this case, the court had to determine whether a person's interest in his Social Security benefits is "property" that is protected by the Fifth Amendment. As noted above, the court found that it was not.
The case has been criticized on many grounds. In dissent, Justice Black argued that the Court's holding was motivated by anti-communist bias. Charles Reich, in The New Property, 73 YALE L.J. 733 (1964), argued that Social Security benefits should be considered to be "property" for the purposes of the Fifth Amendment. Social Security, he argued, is a compulsory substitute for private property, is heavily relied on, and is important to beneficiaries. The beneficiary’s right to Social Security, he argued, should not be subject to public policy considerations (especially not something resembling a loyalty oath, as was the case in Flemming). According to this argument, allowing government benefits to be revoked in this way too extensively threatens the system of private property. Protecting private property is an important goal, he argued; the Framers thought that protecting private property would be one way of protecting individual liberty.
