The eligibility of Puerto Rico residents for federal safety net benefits such as Social Security Supplemental Income is expected to get high profile attention in Washington this year.
SSI benefits for residents of Puerto Rico were among the pledges that President Biden campaigned on last year that would impact the island’s economy.
It’s also high on the wish-list of the territory’s sole representative in Congress and local elected officials on the island.
The SSI debate is expected to highlight an array of other federal safety-net benefits that residents of Puerto Rico are denied. Among them: food stamps under the Supplemental Nutrition Assistance Program, the Aid For Dependent Children program, the Medicare Part D Low-Income Subsidy program, and the federal Child Tax Credit.
Puerto Rico’s sole representative in Congress, Resident Commissioner Jenniffer González Colón, listed SSI among her priorities in a letter to the Biden administration.
Speaker Rafael Hernández Montañez of Puerto Rico’s House of Representatives told The Bond Buyer Tuesday that his focus in Washington right now is only on SSI. The other federal safety-net programs will be addressed afterward.
“I just want to go one by one,” said Hernández Montañez. “They all are really important for the benefits.”
The denial of SSI based on residency in Puerto Rico has been a “discriminatory and racist” policy by the Trump administration, he said.
Hernández Montañez expects the Biden administration to exhibit “a completely different” soul on this issue and provide eligibility for around 300,000 residents. “We are talking about people who really need it,” Hernández Montañez said. “They have no resources.”
Hernández Montañez recently sent a letter to U.S. Attorney General nominee Merrick Garland asking him to drop a Trump administration appeal to the Supreme Court that seeks to continue the denial of SSI benefits to residents.
The court’s nine justices have reviewed the case during several recent closed-door conference meetings, but haven’t yet decided whether to let an appellate court ruling stand or to schedule it for oral arguments.
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Vaello-Madero conflicts with two earlier Supreme Court rulings that upheld the exclusion of Puerto Rico residents from SSI benefits and another federal benefit program solely based on residency.
Califano v. Torres (1978) denied benefits under SSI.
The other case, Harris v. Rosario (1980), denied residents of Puerto Rico access to the federal Aid For Dependent Children program, known as AFDC.
The earlier rulings justified the exclusion because residents of Puerto Rico are generally exempt from paying the federal income tax; the cost to the federal government would be significant, and granting the benefits might disrupt the island’s economy.
In the latest case, plaintiff José Luis Vaello-Madero began receiving SSI disability benefits while living in New York. He continued to receive them after moving back to his native Puerto Rico to be closer to family in July 2013.
The federal government sued him in August 2017 seeking restitution of $28,081 in SSI benefits that it said it had incorrectly paid to him from August 2013 to August 2016. The government said he was living outside the United States.
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, just like Puerto Rico.
Meanwhile, legal non-citizens living in the 50 states are eligible for SSI and accounted for 6% of all recipients in 2017.
Vaello-Madero’s attorneys argued that the exclusion of Puerto Rico from the SSI program violates the equal-protection component of the Due Process Clause of the Fifth Amendment.
A federal district court agreed and granted summary judgement in February 2019.
The district court judge suggested that Congress may have excluded Puerto Rico in order to harm citizens “of Hispanic origin,” but found it unnecessary to examine that theory because the exclusion of Puerto Rico residents failed even “rational basis scrutiny."
The new Biden administration will presumably not defend the current SSI system if the high court schedules oral arguments and could argue for extending SSI benefits to other territories. Or the administration could opt for congressional legislation, which justices on the high court would likely prefer.
If the Biden administration takes the legislative route, it could pair SSI with its campaign proposal to make all Puerto Rico residents eligible for the SNAP food program.
Biden’s campaign cited a 2015 study that found 33% of adults in Puerto Rico to be food insecure, “a share that likely increased in the aftermath of subsequent natural disasters.”
“While those living in U.S. states who meet SNAP eligibility criteria are guaranteed food support, families in Puerto Rico must make do with an annual block grant program which does not automatically adjust in times of higher need,” Biden’s campaign said.
Eight million Americans currently receive SSI benefits, 86% of whom are severely disabled. Very low-income older Americans age 65 and over also are eligible.
More than half of SSI beneficiaries receive the basic monthly SSI benefit of $794 for individuals and $1,191 for couples because they have no other income.
Residents of Puerto Rico are currently eligible only for the significantly less generous Aged, Blind, and Disabled (AABD) program which is a federal block grant rather than an entitlement like SSI.
The liberal-leaning Center on Budget and Policy Priorities points out that disabled children under age 18 in Puerto Rico are ineligible for AABD but would be eligible if SSI benefits are extended to residents.
In 2011 residents of Puerto Rico who received AABD were paid average monthly benefits of $58 that would have been $418 under SSI, according to the U.S. Government Accountability Office.
Under both programs, recipients must have less than $2,000 in assets, including cash, bank accounts, stocks and bonds, life insurance, and farms or other property but excluding their primary residence and a car.
The Vaello-Madero case could push the Biden administration and Congress to make Puerto Rico a priority this year, according to Javier Balmaceda, senior policy analyst focusing on Puerto Rico at the Center on Budget and Policy Priorities.
“A lot of the way that Puerto Rico policy moves in Congress is driven by a sense of urgency,” said Balmaceda. “Puerto Rico faces recurrent fiscal cliffs for all these programs because they are not entitlements. They are usually given to Puerto Rico in the form of block grants. Medicaid, for instance, is facing a cliff in September of this year. Biden, in his plan, has indicated he would like to extend full coverage to Puerto Rico.”
Kathleen Romig, a senior policy analyst and SSI expert for the Center on Budget and Policy Priorities, said she thinks “the courts might force the hand of the agencies before the legislators get to it.”
Sergio Marxuach, an attorney who serves as policy director for the nonpartisan Center for a New Economy in Puerto Rico, said there is a second pending federal lawsuit that could have an even bigger impact on eligibility for federal safety net benefits.
In that case, known as Pena Martinez, nine residents of Puerto Rico have challenged on constitutional grounds their exclusion from SSI, SNAP and the Medicare Part D Low-Income Subsidy program (LIS).
That’s collectively about $5.3 billion federal safety net benefits which would boost the island’s annual economy by 5%, according to an estimate by the Center for a New Economy.
“The scope is much larger and it would apply to a significantly greater number of people if it stands,” Marxuach said. “These programs are designed specifically to help the poorest of the poor in the mainland. Specifically, with food stamps and SSI, it would provide a huge amount of help to very low income Puerto Ricans.”
Those residents now rely on the local government and extended family members for help, he said.
