Can the federal government take away with one hand what it has given with the other? That issue is due to be argued tomorrow morning in Courtroom 6 of the U.S. Claims Court here, and the outcome of the debate ultimately could affect millions of citizens.
The policy now before Judge Lawrence S. Margolis was laid out very clearly by Congress in 1944. Former members of the military services, the lawmakers said, cannot collect both the retirement pay due them for their years in uniform and any disability pensions for service-related illnesses or infirmities. Every dollar of disability pension reduces retirement pay by a dollar under this policy.
That actually represented a liberalization: For the previous 54 years, Congress had flatly prohibited the payment of disability pensions to anyone on the rolls of the Army, Navy or Marine Corps, active or retired. (The 1944 approach is a bit more favorable because, although the dollar totals paid are the same, disability pensions are "worth" more because they are not taxable.)
There is no dispute about what the law says or about the fact that the Defense Department, which hands out retirement pay, and the Veterans Administration, which is responsible for disability benefits, have been religiously obeying the law.
What is in dispute is whether or not the policy is constitutional.
For four decades, veterans affected by the policy did no more than grumble about it. But now, some have organized themselves into a group called Uniformed Services Disabled Retirees, rounded up 1,772 claimants and gone to the Claims Court seeking an end to the ban on double payments.
Disabled veterans who get civilian jobs lose a part of their retirement pay forever. But veterans who go to work for some federal agency are given the option, when they retire for a second time, of lumping together their military and civilian years in order to receive one larger retirement payment. And those employes get that entire pension, without any reduction, along with their monthly VA checks. That, the plaintiffs argue, is just the sort of unequal treatment that the Constitution forbids.
Not surprisingly, the government does not buy this argument. It is okay to treat different groups of citizens differently, the Justice Department says, as long as the discrimination makes sense and is a rational way of achieving a legitimate government purpose. In this case, the government purpose is clear: to save money. Congress is concerned with "not overburdening the public fisc [treasury]," Justice lawyer Stephen J. McHale told Judge Margolis.
What is really at issue is two different ways of looking at just what the "equal protection" phrase in the Constitution means.
Both schools would knock down arbitrary and senseless distinctions, but one would defer to governmental decisions as long as they met the minimal standard of having some rational basis for treating one group differently than another.
The other, more activist, interpretation of the Constitution would have judges override any discrimination that does not have "a demonstrably fair and substantial relation to its legislative objective," in the words of Jeffrey M. Glosser, the lawyer for the plaintiffs.
Profs. Jesse Chopper, Yale Kamisar and Laurence Tribe, who charted the popularity of the two views in a 1982 book, found the more expansionist interpretation to be the dominant one during the first 35 years of this century; the attitude giving greater deference to government policy, they found, was most frequently followed between 1935 and 1970. In the years since, they have found a kind of vacillation that, in effect, gives Judge Margolis the freedom to follow whichever precedents he wants.
The Margolis decision may affect a lot more than disabled military retirees, for it is not uncommon for Congress to save money by mandating that those who have earned two different benefits can, in fact, have only one of them. For instance, the lawmakers in 1982 decreed that, in the case of military retirees who had become civil servants, each time their military pensions were increased by a cost-of-living adjustment, they would lose an equal amount of their civil-service pay. (Congress relented last year and repealed that provision.)
Similarly, some mental patients in public institutions are denied Medicaid payments they might otherwise get, and workers who had spent part of their careers working for a railroad and part in other industries were told in 1974 that they could not collect both Social Security and Railroad Retirement benefits.
All three of those examples of unequal treatment were upheld by the courts, which is one measure of the odds against the veterans overturning what has been close to a century of government policy.
But if they manage, it will be a warning to Congress that it cannot save money by making recipients choose between two sets of earned benefits.