An easy read, and a very informative primer on some long-neglected cases. fLyle Denniston, Scotus Blog

A passionate, thoughtful, provocative, and eminently readable book by two of America's most influential libertarian lawyers and legal thinkers.--Eugene Volokh, Professor of Law, UCLA; Founder of the Volokh Conspiracy Blog

Levy and Mellor offer fascinating insights on twelve of the most important and controversial cases of our time. Readers will gain new appreciation for the Supreme Court's role in affecting their lives and liberties. With that appreciation will come heightened understanding of the stakes in future Supreme Court nominations.--Nadine Strossen, Former President, American Civil Liberties Union

Many of the most harmful decisions of the U.S. Supreme Court have been subject to sustained attack in separate places. But I am not aware of any volume whose major function is to critique the worst in one place. Into this void step two fearless writers, Bob Levy and Chip Mellor, who through their work have been deeply involved in shaping our legal and political culture.--From the Foreword by Richard A. Epstein, Professor of Law, University of Chicago

THE DIRTY DOZEN

HOW TWELVE SUPREME COURT CASES RADICALLY EXPANDED GOVERNMENT AND ERODED FREEDOMBy ROBERT A. LEVY WILLIAM MELLOR

CATO INSTITUTE

Copyright © 2008Robert A. Levy and William H. Mellor
All right reserved.
ISBN: 978-1-935308-27-0

Contents

New Preface to the Paperback Edition: Guns, Bailouts, and Empathetic Judges.....................xiiiForeword by Richard A. Epstein..................................................................xxvIntroduction....................................................................................1CHAPTER 1.......................................................................................19CHAPTER 2.......................................................................................37CHAPTER 3.......................................................................................50CHAPTER 4.......................................................................................67CHAPTER 5.......................................................................................89CHAPTER 6.......................................................................................107CHAPTER 7.......................................................................................127CHAPTER 8.......................................................................................143CHAPTER 9.......................................................................................155CHAPTER 10......................................................................................169CHAPTER 11......................................................................................181CHAPTER 12......................................................................................198Afterword Judicial Activism and Tomorrow's Supreme Court.......................................215Postscript #1 Roe v. Wade (1973)...............................................................225Postscript #2 Bush v. Gore (2000)..............................................................229Acknowledgments.................................................................................233The Constitution of the United States of America................................................235Table of Cases..................................................................................255Notes...........................................................................................261Index...........................................................................................291

Chapter One

Promoting the General Welfare

The Dirty Dozen List: Helvering v. Davis (1937) Dishonorable Mention: United States v. Butler (1936)

What Is the Constitutional Issue?

"The Congress shall have Power To lay and collect Taxes, ... [to] provide for the common Defence and general welfare...."-U.S. Constitution, Article I, Section 8.

If you think that Social Security, Medicare, and other welfare systems are bedrock American institutions without which the United States cannot survive in the modern world, then this will not be your favorite chapter. Indeed, we will be arguing that programs such as Social Security, which collect money from some taxpayers and redistribute the money to other taxpayers, are unconstitutional. It is possible, of course, that those programs are both desirable (a policy judgment) and unconstitutional (a legal judgment). If that's the case, then either the programs have to be amended to comply with the Constitution or the Constitution has to be amended to authorize the program. Instead, our politicians today enthusiastically redistribute our taxes without asking this crucial question: Where in the Constitution is the federal government authorized to rob Peter in order to pay Paul?

Typically, we hear three explanations for the proliferation of unconstitutional redistributive programs: First, whenever government transfers Peter's assets to Paul, it can generally count on Paul's wholehearted approval. And there are so many of those redistributive "deals" that we are all Pauls under one arrangement or another. Moreover, Paul will fight hard for his benefits under a particular scheme, while Peter won't fully appreciate the diff use costs of multiple schemes, each of which confiscates an inconsequential portion of his total assets.

A second explanation is that a program like Social Security is promoted as a retirement plan, not a redistributive program. Never mind that the Constitution is no more permissive of federal retirement planning than it is of federal redistribution. Proponents correctly foresaw that Social Security would be easier to pitch to the American public if portrayed as personal savings for old age. Each participant, so the story goes, would pay taxes into the system during his working years and then extract the taxes, with interest, to meet post-employment living costs. If only it were true. In fact, however, the employment taxes paid into the system are used immediately to compensate current retirees and fund the federal government's perpetual deficit. In return for the dollars that the government "borrows" from workers, it issues IOUs that are held in a so-called trust fund, which supposedly will cover promised Social Security benefits when each worker retires.

Sadly, down the road when the retirement date arrives, changing demographics will have radically reduced the ratio of workers to retirees. As a result, rather than collecting more in taxes each year than is paid out in benefits, the Social Security system will run a deficit-as early as 2017. That's when we will begin drawing on the IOUs in the trust fund. But to generate the cash required to redeem those IOUs, the federal government must raise taxes, cut other spending, or fl oat new IOUs. The only alternative is to cancel the old IOUs by cutting Social Security benefits. By the way, those are the same four options government would have if there were no trust fund. Thus, the fund itself is an illusory asset for workers.

Moreover, the IOUs in the trust fund will be exhausted by roughly 2040. Social Security will then have to rely solely on revenue from the payroll tax, which will not be sufficient to pay promised benefits. By law, once the fund is exhausted, benefits will automatically be reduced. That means no worker has a legal right to reclaim his Social Security contributions-much less any interest thereon-to pay for his retirement. Benefits can be changed, cut, or taken away at any time. Contributions are just a tax, not a personal asset. If Social Security were a true retirement system, each participant would have an enforceable claim on his own account, control how the assets are invested, and be able to bequeath the assets to his heirs. Social Security, by contrast, is a Ponzi scheme that redistributes money from workers to retirees. Like other Ponzi schemes, it works only as long as current participants are willing to rely for their benefits on an ever-increasing flow of money from future participants.

Still, there is a third reason-most important for purposes of this book-that our politicians embrace unconstitutional wealth transfers. In a nutshell, the Supreme Court has said it's okay. That was the holding in Helvering v. Davis, the 1937 case that applied the General Welfare Clause to uphold the constitutionality of the Social Security Act.

In Helvering, the Court rejected James Madison's advice. He had argued that the General Welfare Clause was not a grant of added power to...