A Strange Case of Reparations
Ta-Nehisi Coates sparked a national conversation with his June 2014 Atlantic article, “The Case for Reparations,” but it is safe to say that the policies suggested by Coates’s article are nowhere close to being realized. It therefore might surprise people to learn that less than a year later, the United States expanded its program for paying reparations to some of its previously wronged citizens.
About a year ago, Social Security’s rulebook was updated to include SI 00830.711: German Social Insurance Payments Under the ZRBG (“Ghetto Pension” Law) for SSI Income. The rule addresses pension payments by the German social insurance program to victims of Nazi persecution who performed paid work while forced to live in Ghettos. The rule began treating “Ghetto Pensions” the same way the Social Security Administration treats reparation payments: disregarding them as income for Supplemental Security Income (SSI) benefit determination.
In this piece, I am going to argue that the United States’ payment of SSI to people under these rules is best understood as reparations from the US government for the Holocaust. I am then going to consider what that means for a country that has so deeply failed to atone for its own sins.
First, a little background: SSI is a safety net program meant as a last resort for the elderly and disabled. When people work and pay Social Security taxes, they insure themselves—and in some cases their families—against disability and old age. When people become disabled or elderly but do not have enough work credits to qualify for a Social Security benefit, or when their Social Security benefit is very small (less than $753 currently), they receive an SSI benefit instead of or in addition to a Social Security benefit.
A key thing to understand about SSI is that no one is entitled to actual SSI dollars. SSI eligibility guarantees a minimum total monthly income of $733–about 75% of the poverty line for an individual–but almost all other means of support must be exhausted before SSI kicks in. If an SSI beneficiary receives a Social Security benefit or a veteran benefit, collects a private pension or disability benefit, goes back to work, receives child support or alimony, inherits money, or even receives a free or discounted place to live from a friend or family member, the SSI benefit is reduced. For most “unearned income”–any income other than wages—the SSI benefit is reduced by one dollar for every dollar received after the first 20 dollars (i.e., if someone receives $100 in unearned income, her SSI benefit drops by $80).
Payments made to individuals because of their status as victims of Nazi persecution are disregarded in determining benefits for need-based federal programs like SSI, meaning otherwise eligible survivors can receive reparations benefits and the maximum SSI benefit. This was first decided for SSI in Grunfeder v. Heckler, a ninth circuit case about a survivor, Felicia Grunfeder, who had lost her $119 monthly SSI benefit and Medicaid eligibility because of a $170 monthly reparation payment from the German government and sought reinstatement through the court. The dissent explained the problem: “The SSI program is a need-based program. An individual is eligible for SSI benefits if that person’s income and resources fall below certain statutory figures. Grunfeder’s resources do not fall below those figures.”
If describing a Holocaust survivor suffering from debilitating trauma and related mental illness surviving on a reparation payment equivalent to 47% of the 1980 poverty line as too rich to qualify for financial assistance and healthcare sounds a little heartless, welcome to the world of US public benefits. Here is some legislation you should support. Something was clearly wrong with the picture the judges saw. But the same thing that was wrong for Ms. Grunfeder is wrong for the disabled and elderly people caught in the same trap–a situation where pensions, Social Security benefits, and VA benefits are too little to live on but too much to qualify for SSI–so the court did not justify itself based on a sense of equity or the survivors’ needs.
Instead, the judges argued that various actions by Congress implied an intention to exclude the income because it was intended as reparations. (This supposed intention was eventually realized in a 1994 law, which exempted payments made to victims of Nazi persecution from consideration as income for means-tested federal programs including SSI, food stamps, subsidized housing, and several others.)
For the judges’ logic to work, they had to place Holocaust reparations into a pattern of other income exclusions. They cited federal reparations payments to Alaskan Native Americans, as well as the Blackfeet and Gros Ventre Tribes of Montana Judgment Funds Distribution Act. The latter authorized a 1976 payment to two American Indian tribes, which was excluded from SSI consideration because, according to Senator Abraham Ribicoff, Congress intended the payments to “‘rectify past injustice perpetrated against the American Indian.’” The majority in Grunfeder argued that the set of specific exclusions was meant to imply a category, and, based on Congress’s history of memorializing the Holocaust and providing tax benefits to survivors receiving reparations, that Holocaust reparations belonged in that category. Similar exclusions currently include Agent Orange settlement payments, Hostile Fire Pay from the Uniformed Services, Radiation Exposure Compensation Trust Fund payments, Japanese-American and Aleutian Restitution payments, DOD payments to certain persons captured and interned in North Vietnam, and victim compensation income.
That would all make a lot of sense except for one thing: The United States did not perpetrate the Holocaust. Thus, it seems curious that the judges would cite other instances of reparations as indications of Congressional intent. (This point was made in the previous ruling by a ninth circuit panel before the case was taken en banc, but the judges in the final ruling believed the precedent applied nonetheless.)
Was this United States’ admission of guilt for refusing Jewish refugees before the war or not intervening more effectively to end the Shoah? Doubtful, because that runs so deeply against the America-as-liberators narrative that Grunfeder cites and embodies. More likely, the US is paying these Holocaust reparations (or perhaps quasi-reparations) because the Holocaust represents the failure of humanity, Western democracy, science and reason, and other values United States thinks itself to embody. The Holocaust represents a grave and universal failure, and the US is willing to play its part in atoning.
But the United States has its own victims to make whole, particularly African-Americans, who suffer the enduring economic and social harm of slavery and an ongoing history of racist policies. Our willingness to participate in a reparations program for our indirect victims shows the hypocrisy of our refusal to pay our direct victims and their heirs.
My point is not to argue against the reparations income exclusion for Holocaust survivors or fulfilling what the judges in Grunfeder called “our Government’s interest in restoring a semblance of normal existence to Holocaust Survivors who are part of our society.” My point, instead, is to remind us of what we are capable of doing when we actually care about correcting an injustice.
If the United States can participate meaningfully in the reparations program for Holocaust survivors—and in a way that recognizes intergenerational suffering and trauma no less—there is no excuse for our national failure to engage in what Coates described as a “national reckoning that would lead to spiritual renewal.” There is no excuse to deny reparations to Black Americans for slavery and its ongoing aftershocks. None at all.
There are several key factual and logical errors in this piece.
#1. The opening of the article writes that “Social Security’s rulebook was updated…” and that ” The rule began treating “Ghetto Pensions” the same way the Social Security Administration treats reparation payments: disregarding them as income for Supplemental Security Income (SSI) benefit determination.”
This is simply false— a 1994 act of congress (See http://www.wnylc.com/health/entry/65/ for a fuller treatment of these exemptions) introduced this exemption. The 2014 link cited by the author is merely a reminder for SSI staff to treat a very specific Holocaust reparations payment under the 1994 exemption. See http://nylag.org/news/2014/10/nylag-advocacy-protects-social-security-benefits-of-holocaust-survivors for a brief history of the activism by NYLAG that led to the 2014 memo.
#2. The author writes that the “United States’ payment of SSI to people under these rules is best understood as reparations from the US government for the Holocaust.”
This is incredibly wrong-headed and misleading (I say misleading because it appears that the author actually has experience with benefits law, and thus may manage to actually convince people who do not check the author’s claims).
Here is a brief list of items that fall under unearned income (in the context of food stamps, which is the benefits area I have the most experience in personally):
(1) Job- or training-related expenses. Reimbursements or flat allowances for job- or training-related expenses such as travel, per diem, uniforms, and transportation to and from the job or training site. Reimbursements which are provided over and above the basic wages for these expenses are excluded; however, these expenses, if not reimbursed, are not otherwise deductible. Reimbursements for the travel expenses incurred by migrant workers are also excluded.
(2) Out-of-pocket volunteer expenses. Reimbursements for out-of-pocket expenses of volunteers incurred in the course of their volunteer work.
(3) Medical or dependent care reimbursements.
(4) Specific student educational expenses.
A full list for NY State may be found: https://govt.westlaw.com/nycrr/Document/I50c6555ecd1711dda432a117e6e0f345?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default)
In other words, these forms of “income” do not count towards the amount of food stamps you receive. The author made it seem like holocaust reparations are a rare exception, when in fact there are many.
There are also many more kinds of unearned income for SSI, such as receiving food stamps, home energy assistance, etc… See https://www.socialsecurity.gov/ssi/text-income-ussi.htm (NB: I never worked closely with SSI cases, so do not rely on my description of unearned income— I have much more confidence in my understanding of food stamps and public assistance budgeting).
The author’s analogy of treating holocaust benefits as unearned income as tantamount to reparations is just wrong— it is much more akin to a tax exemption. A much closer analogy, in my opinion, is the comparison of holocaust benefits to child-support benefits, which are also counted as unearned income for food stamps. Both forms of income are coming to help a family deal with a uniquely compromised situation— additional expenses for childcare, additional expenses for the medical bills that are typical for old-aged holocaust survivors. Should the government be more charitable to all seniors in the counting of earned income for SSI? Of course! But there is no comparable deduction to make for reparations to slavery. Additionally, when you view this deduction in a larger context of budgeting unearned income for benefits, it becomes much more benign when you consider what else is deductible.
I think that the real moral of the story from the author’s evidence is:
-Government benefits are too strict in the counting of unearned income, and are in general too low
and
-If there was an analogous reparations payment to holocaust benefits (e.g. from South Africa if they exist), it should also count as unearned income.
No further conclusions can be drawn, because the government’s accounting of holocaust reparations for the purposes of government benefits has no logical connection to the concept of actively spending money on reparations.
One final argument to buttress my point— Food Stamps, Public Assistance and Medicaid are all block grants from the federal government to each state to run their programs— thus, no matter how the state accounts its budgeting, it receives the same amount of money. New York, for example, cannot decide to simply give more money to holocaust survivors, because it receives a check from the federal government. Reparations, on the other hand, necessarily involve new money being spent by the federal government. From my understanding, SSI remains an entitlement program, so if I am correct, the government is spending some money with the deductions granted to survivors (obviously a tiny drop in the SSA budget).
NB— I support reparation payments AND actually increasing the entitlement/block grant programs to match the cost of living in America…
Thanks for these thoughts! A few responses:
1. I have the same reading of the 1994 law. When I wrote that “the rule began treating…” I meant that there was a practical change in SSA policy implementation (that’s all the POMS is). I did not mean to imply that there was a new law, just a new rule in the book that will make sure the law functions as intended. With a couple years of SSI experience, I can tell you with some certainty that if it’s not in the POMS, it’s not getting done. That said, it seems like it’s not clear from what I wrote that the 2014 rule is just an implementation of existing law, so I’m glad Eli brought the story of how that rule got into the POMS to everyone’s attention. Thanks!
2. I think understand why my presentation of the income exclusion as reparations is challenging. It was for me too! It’s a weird sounding argument, but I hope you’ll work through my logic with me.
Eli provided example of excludable income types (I didn’t use the word “exludable” in the essay because it’s not in some dictionaries, but I’ll use it here), I think it’s important to understand what each of those exclusions is doing. I dug up an old draft of the essay that goes through each category of excludable income types in more detail, but I cut that section because the Grunfeder decision explicitly places Holocaust reparations in the category of other reparations. Below is what the earlier draft said, ending with the long quote from the Grunfeder decision:
To understand the Holocaust exclusion, we must examine a number of other types of excludible income that similarly deviate from SSI’s normal logic because of specific legislative or judicial actions. Most fit into a few categories that justify their exclusion as countable income: certain anti-poverty or emergency programs are meant to work in conjunction with SSI, education assistance is useful for getting people off of SSI, and other programs advance certain state interests like getting people to move to Alaska or participate in clinical medical trials. The final category, in my analysis and consistent with the majority in Grunfeder, is payment made to people who have been wronged. Agent Orange settlement payments, Hostile Fire Pay from the Uniformed Services, Radiation Exposure Compensation Trust Fund (RECTF) payments, Japanese-American and Aleutian Restitution payments, DOD payments to certain persons captured and interned in North Vietnam, and victim compensation income are all types of “unearned income” that are excludable. Similarly, the majority in Grunfeder cited a 1976 law that excluded money distributed to the Blackfeet and Gros Ventre Tribes from SSI income rules because of what Senator Abraham Ribicoff was quoted as calling “‘congressional intent to rectify past injustice perpetrated against the American Indian.’”
The majority in Grunfeder was convinced that the set of specific exclusions was meant to imply a category, and based on Congress’s history of memorializing the Holocaust and providing special benefits to survivors, that Holocaust reparations belonged in that category:
“Therefore, even though Congress has not spoken explicitly on the issue whether German reparations payments are to be excluded from income for SSI eligibility purposes, Congress’s reaction to the Holocaust and its recognition of the restitutionary nature of the reparations payments indicate an intent to exclude those payments from countable income for SSI purposes.”
Point is, all the exclusions serve program purposes or state interests. The question I asked myself is what state interest is being served by the Holocaust reparation exclusion? The judges in Grunfeder answer that question remarkably clearly. As I quoted, they called it “our government’s interest in restoring a semblance of normal existence to Holocaust Survivors who are part of our society.” Crucially, the restoration of “a semblance of normal existence” is not justified by the survivors’ special material needs but by the fact that these reparations were meant to “assuage psychological wounds that will never heal.” The principle of international comity says that we should generally not interfere with other countries’ laws, which is part of the reason why we should allow the reparations to achieve their purpose of functioning as reparations and not as providing for basic needs. But the result of that is that the US ends up paying money to survivors of the Holocaust that they would not pay to them except for their status as survivors because of a US government interest in making those survivors (somewhat) whole for the crimes committed against them. I know it sounds weird, but I just don’t know how else to think about it except as reparations. No, it’s not exactly the same thing, but in all of the relevant features except for an admission of fault (addressed in the essay), it’s pretty darn close.
Now you could come back at me and say that the international comity is the real thing at play and the US would want to honor Germany’s laws’ intentions regardless of the particular law’s intentions are, but there’s a problem. International comity is a pretty limited principle to begin with, and there’s a particular problem with discussing public benefits. The same logic could motivate someone to claim that SSI should disregard income from any foreign social insurance program aimed at providing a decent life for their beneficiaries. (They all are aimed to do that, at least rhetorically, and counting it against SSI surely frustrates that intention.) Not only would SSI pay a ton of money to a super random class of people (middle to upper income retirees who worked most of their careers in other countries but retired as citizens in the US), but the Windfall Elimination Provision in Social Security would fall part as well and similarly start paying this super random group of people. That wouldn’t make any sense, and there are much more sensible international agreements instead. The judges could not rely on international comity alone; rather, they needed it to work with the fact that reparations specifically were at issue and that the US had a long history of honoring the intentions of its own reparations programs by excluding the income for benefits calculations. The problem is that that still doesn’t account for the fact that the Holocaust reparations were markedly different from the precedents, which all involved US fault. The last piece of the puzzle was the US’s relationship to the Holocaust–that Congress repeatedly took action to memorialize the Holocaust, provide for its victims, and make it into a piece of American history. (Which, by the way, is all good stuff. I’m all for this income exclusion, and I’d even be for it if SSI had fairer rules and this were a purely deontological discussion and not one about people’s basic needs being met.)
Now, typically we think of reparations as admitting fault + paying compensation, but I actually think that there are plenty of cases where that’s not the formula. Think about “no fault” product liability settlements–companies can avoid admitting fault but still recognize that somebody has been damaged by their product and decide to pay that person. Or think about reparations to African-Americans. By supporting reparations, would I be admitting fault for slavery, Jim Crow, redlining, mass incarceration, etc.? Not really; instead, I would be admitting responsibility because I’m someone who has benefited from the legacies and continuation of a racist system. It’s not my fault that the system is that way, but it is my responsibility to fight it. I think getting caught up on “fault” and “guilt” instead of “responsibility” is what keeps a lot of white Americans from adopting anti-racist views such as support for reparations. As a I argued in the essay, I do not think the US is admitting fault for the Holocaust by paying reparations, but I think the US is taking responsibility. This is admirable, and we should be proud of those reparations. (Except, you know, that they are hypocritical…)
3. Now, to a couple of Eli’s specific points…
a. “[I]t is much more akin to a tax exemption.” Exactly! I agree with you 100%. The judges in the case specifically cite that comparison as well. Again, the question is what state interest does the tax exemption serve? I think I’ve made my case as clearly as possible.
b. I don’t quite understand the point you’re making in the second to last paragraph about block grants because, as you said, with SSI there is additional money being spent as a result of this exclusion. It’s a drop in the bucket for sure, but it’s a symbolic one that’s important. It both affirms the US commitment to Holocaust victims being made whole and it validates the German program as being part of the right way to go about compensating one’s victims. This is why I think it’s hypocritical to support the SSI income exclusion but not reparations for African-Americans, which is the point of my essay.
c. “f there was an analogous reparations payment to holocaust benefits (e.g. from South Africa if they exist), it should also count as unearned income.” I agree , but the Holocaust reparations is currently the only one in the SSI law as far as I can tell. I don’t know what other programs would be relevant, but there actually have been other American groups that have cited the Holocaust reparations income exclusion as precedent in Congressional debates and court cases about exempting certain types of income. The relative quickness to move on this issue is, I think, symbolic of the place of the Holocaust in US History. Note that the United States Holocaust Memorial Museum was built before the The National Museum of the American Indian or the (currently under construction) National Museum of African American History and Culture, and that there is no Smithsonian museum dedicated to slavery, native American genocide or dis-population, or any foreign atrocities other than the Holocaust. The Holocaust Museum tends to fill the latter void and is the Holocaust in general is frequently placed by the US at the center of our collective consciousness of crimes against humanity. For better or for worse that’s the reality, but I think as Jews we have an obligation to do something useful with that fact. In high school school I was part of an amazing group that took Illinois’s Holocaust education mandate and lobbied New Trier Township High School to hold a full week of activities surrounding genocide awareness and anti-genocide action. In 2007, we had experts, survivors, and members of Congress speak about the Armenian Genocide, the Holocaust, the Rwandan Genocide, and Darfur; and we helped students find their voices in lobbying against the genocide in Darfur. This is the model I have in mind when thinking about how to use the US recognition of the Holocaust to serve broader human rights causes.
d. You support reparations. Great! Then I understand if you still disagree with me, but I don’t really disagree with you.
As a proud, self-hating Jew, I’m so glad to have found this fringe, far-left, antizionist publication. Kapos of the world unite!