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The Constitution, Social Security, & Healthcare Reform

Mon ,05/10/2009

The author once attended a retirement seminar sponsored by AG Edwards. The speaker tried to convince the participants that no matter how much money they had saved, they would eventually run out if they lived long enough. That is unless, of course, they let AG Edwards invest their savings. The speaker did not mention Social Security, and fortunately for those who put their money in stocks, Social Security was there as a safety net.

Social Security was created by the Social Security Act of 1935 in the midst of the Great Depression to provide for retired workers who had lost their life savings. Congresses right to create Social Security was established on the general welfare provisions of the Constitution and by  Article 1, Section 8 which establishes Congresses power to collect taxes and provide for the general welfare of the United States.  It says, “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; but all Duties, Imposts and Excises shall be uniform throughout the United States.”

Several challenges to the Social Security Act of 1935 were decided in its favor by the Supreme Court. The most notable of these was U.S. v. Butler (1936) that held that the Spending Power Clause of the Constitution gave Congress broad power to tax and spend for what it determined to be the general welfare of the country. Because Congress has discretion to determine what is the general welfare, no court since Butler has ever invalidated a federal spending program on the ground that the general welfare of the country was not being promoted.1 Also, in Helvering v. Davis ( 1937), the Supreme Court defended the constitutionality of the Social Security Act of 1935 requiring only that the welfare spending be for the common benefit as distinguished from some mere local purpose. It affirmed a District Court decree that held that the tax upon employees was constitutional. 2

Social Security is certainly a government manage retirement program but it has not put private retirement funds such as AG Edwards out of business. Social Security provides a safety net so that no matter how fortunate or unfortunate you are in your choices and investments, you will never be destitute. Congress has the authority to create a government managed health care safety net for Americans. It would likely not put private insurers out of business but it would certainly provide a safety net for health care.

We are now in the midst of an economic downturn that has cost millions of Americans their jobs and their health insurance. What better time to enact health care reform.

(1) http://qanda.encyclopedia.com/question/butler-decision-428463.html

(2) http://en.wikipedia.org/wiki/Helvering_v._Davis