Americans have no legal right to collect Social Security benefits, even if they have paid Social Security payroll taxes throughout their working lives, according to the Cato Institute.

Social Security benefits are not "property," in the legal sense. Examples of property include insurance annuities, where the individual receives a contractual guarantee to periodic benefits in exchange for premiums, and interest-bearing bank accounts, where an individual receives a contractual promise to pay the principal plus interest. Both are property, with legally enforceable rights. Moreover, the right to an annuity or bank account can be passed on to one's heirs, whereas Social Security benefits cannot.

• In Helvering v. Davis (1937), the Supreme Court ruled that Social Security is not an insurance program -- thus payroll taxes are not contributions that guarantee a benefit, but are taxes like any others.

• And in Flemming v. Nestor (1960),the Court ruled that workers and their families have no legal claim to their payroll tax payments.

Thus many Americans' retirement security is solely dependent on political decisions by Congress and the President, and can be reduced or eliminated at any time. Benefits have been cut for many workers over the life of the program. For instance, workers born after 1955 face a higher retirement age; benefits of retired federal workers are reduced, even if they retired early and paid Social Security taxes; and the benefits of individuals who work after retirement are reduced.

Personal retirement accounts would provide workers with a legal, contractual property right to retirement benefits. In addition, personal accounts have a higher rate of return and can be passed down to an individualís heirs.

Source: Charles E. Rounds, Jr., "Property Rights: The Hidden Issue of Social Security Reform," SSP No. 19, April 19, 2000, Cato Institute, 1000 Massachusetts Avenue, N.W., Washington D.C. 20001, (202) 842-0200.