U.S. Capitol. Source: Flickr / phototravel1.

Tens of millions of Americans rely on Social Security benefits, and hundreds of millions more expect to receive those benefits at some point in the future. Yet a recent controversy concerning Social Security payments made to suspected Nazi war criminals has reopened a pressing question that could have broader implications in future years: when the government can take away your Social Security benefits.

The Nazi controversy and Social Security
The case at issue involves dozens of concentration-camp guards and others suspected of supporting the Nazi war effort and millions of dollars they received through Social Security. Under federal law, even those whom the government forced out of the country were allowed to keep their benefits as long as they were never formally deported, according to an Associated Press investigation. Many government officials didn't approve of the practice, which was intended to head off extended deportation hearings and raise the number of former Nazis forced to leave the country, and the resulting international consequences led to tension among some U.S. allies.

In response, lawmakers are rallying to pass laws to close the perceived benefits loophole and take away any future payments to surviving recipients. The measures have bipartisan support, and proponents hope for quick action even amid the lame-duck session of Congress that followed the recent midterm elections.

Few would argue that rewarding suspected war criminals with financial incentives to leave the U.S. was an intended use of Social Security funds. Yet the speed with which Congress is taking action raises questions that every American needs to ask: just how secure are your right Social Security benefits, and could lawmakers take them away from you as well?

No property right to Social Security
Most Americans think of their Social Security payments as an earned benefit, pointing to the payroll taxes they paid over the course of their careers and believing that, like contributions to a private pension plan, they somehow "own" their future Social Security payments. Consequently, most people would not respond well to the notion that the government could simply bring Social Security to a halt and leave future recipients without any benefits at all.

U.S. Supreme Court. Photo: Kjetil Ree via Wikimedia Commons.

Yet the Supreme Court has already ruled that Americans don't have a property right to their Social Security benefits. In a 1960 case with similarities to the current Nazi controversy, a man named Ephram Nestor was deported for being a Communist Party member, and a federal law required that deportees have their Social Security benefits stopped. Nestor pointed to the taxes he had paid as entitling him to benefits, but the Supreme Court disagreed, refusing to see Social Security as similar to a private annuity contract.

Indeed, in some ways, the constitutionality of Social Security itself rests on the notion that there is no property right to benefits. In 1937, the Supreme Court upheld the law establishing Social Security in part on the grounds that it wasn't a contributory insurance program but rather was simply a means of collecting taxes and then making distributions of public funds. In rejecting an employee's entitlement to Social Security, the court said "taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way." As a result, the government has substantial latitude to change the rules when it comes to Social Security payments, and the constitutional protections against takings of property simply don't apply.

Where there's a (political) will...
Of course, just because lawmakers could cut Social Security more broadly doesn't mean that they will. Singling out unpopular groups like Nazi war criminals is politically easy, but a broader-based reduction would clearly generate greater opposition and political fallout.

Source: SSA.

At least thus far, most reforms to Social Security that have led to reduced benefits have affected those with decades to go before claiming retirement payments. The law that authorized the increase of the retirement age from 65 to 67 was part of the Social Security Amendments of 1983, but it didn't start phasing in until those who were 45 years old in 1983 reached early retirement age in 2000. The full increase to 67 won't be done until 2022, when those who were 23 years old in 1983 reach early retirement age.

Nevertheless, even current Social Security recipients need to keep an eye on Washington to make sure lawmakers preserve their benefits. With proposals to reduce future cost-of-living increases for current recipients, there's no inherent property right defending your benefits from the political process. If Social Security is important to you, it's up to you to ensure that your representatives take your interests at heart.