Patrick Bohan for Congress: Retirement Planning Policy

Retirement planning should be the responsibility of the individual and family, not the federal government. Our national debt is huge, but unfunded liabilities that both federal and state governments own retired federal and state workers is 10 times larger! Yes, our liabilities are approaching 300 trillion dollars! Stacking 300 trillion one-dollar bills would go to the moon 75 times! The first step to regain any fiscal responsibility is to end Social Security. This will be painful, but Social Security should be replaced with individual retirement plans similar to 401K solutions offered by businesses. How did we get in this fiscal mess of 300 trillion dollars?

In Steward Machine Company v. Davis (1937), The Supreme Court (SCOTUS) upheld the unemployment compensation provision of the 1935 Social Security Act. In Steward, SCOTUS used a broad interpretation of federal government powers using the spending and general welfare clause. Both the Social Security Act and the unemployment provision, as was every entitlement act to follow in American history, was a coercive use of government power. For instance, if states opted out of entitlement laws, then they could never recoup the federal tax monies paid by its constituents. In Steward, Justice Benjamin Cardozo wrote, “the petitioner confuses motive with coercion” since “the states are at liberty, upon obtaining the consent of Congress, to make agreements with one another.” That may be true, but the federal government rarely takes advice from states, it only dictates terms. There is a fine line between motive and coercion.

SCOTUS also ruled that the Social Security Act was necessary and proper to promote the general welfare of the nation in response to the Great Depression (Helvering v. Davis). In his dissent, Justice James McReynolds wrote, “I cannot find any authority in the Constitution for making the federal government the great almoner of public charity throughout the United States.” Justice George Sutherland correctly predicted that “encroachments upon other functions, will follow.” He also added “Imposing a tax that could be avoided only by contributing to a state unemployment compensation fund was effectively coercing each state to make a law creating such a fund.” Steward marked the beginning of New Deal programs that were found constitutional using the spending clause to promote the general welfare of the nation. The precedent for this decision was established in United States v. Butler (1935). Although the Butler decision invalidated many provisions of FDR’s 1933 Agriculture Adjustment Act using the Tenth Amendment, for some reason SCOTUS felt compelled to provide an expansive interpretation of the spending clause as it pertains to the promotion of the general welfare of the nation. In fact, SCOTUS suggested Congress has powers not enumerated in the Constitution when using the spending clause.

Liberty is much more than freedom and a right. Liberty is analogous to the Ninth Amendment. Liberty and the Ninth Amendment is what allows us to pursue our fundamental rights without government restraint.

The Sixteenth Amendment does not provide that federal tax revenue obtained from income can be used for anything other than enumerated Constitutional powers. However, that did not stop SCOTUS from using a national emergency, the Great Depression, as an excuse for the federal government to provide itself an illegal grant of power in Helvering v. Davis (1937) that is nowhere to be found in the Constitution.

Many scholars argue that Social Security is not a welfare program, but it is! The reason United States liabilities are astronomical is because most people will receive more money from social security then what they paid into the system. That is the definition of welfare. Social Security is a scam. Originally, when it was passed, less than half of all Americans would collect any funds since the life expectancy in 1935 was about 59 and no one could collect funds until they were 65. Today, since life expectancies are near 80, the system cannot be sustained because it is paying out much more than it receives. Since the United States is in debt, funding for the current generation on Social Security is coming from younger taxpayers. That means Social Security is a Ponzi scheme in which money is confiscated from struggling young people and then given to wealthier older persons. Moreover, since the median age of Americans is increasing, there are fewer people to pay into the system when, at the same time, the percentage of people who are eligible for Social Security is rising. This is why Ponzi Schemes always fail, they are unsustainable. Social Security is broken, and another mess created by the federal government meddling where they have no grant of power and certainly no vision for how the law would play out over the long term.  

Helvering opened the door for the legality of any welfare program using the spending and general welfare clause. But, once again, the general welfare clause was never intended to be an unlimited grant of power for the federal government. In fact, general welfare during the founding era meant for the common good of all citizens therefore, the statement in the Constitution was never intended to be a work around to generate more federal power. If the government could use the general welfare clause to pass anything outside its enumerated powers, then why did the framers bother enumerating powers in the Constitution? After all, any enumerated power would simply be a truism with no official purpose. Helvering is also important because it took the responsibility of social welfare from local charities and churches (where it belongs) and gave it to the government (where it does not belong).