Statutory privileges or franchises are not technically contracts, you need to read the hearings on social security wherein Mr. Altmeyer (founder of Social Security) address the reasons why social security is not a contract. Even members of congress loosely referred to social security as a contract and had to be corrected by Altmeyer. The reason social security is not a contract is because the nature of contracts themselves under American law. Without citing specific definition, you will find that contracts, in order to be called "contracts" must create a reciprocal relationship between the parties that is enforceable in a court of law, id est, that is to say there must be an actual consideration to the parties on both sides of the agreement. Not only must the contract provide a just exchange on either end, the obligations of the contract must be absolutely enforceable for the consideration to actually exist. The problem with social security, licenses and other privileges provided for by statute is that the legislative body that enacted the statute may repeal the statute at anytime, and, since the legislative body possesses immunity to suit with respect to its legislation, the legislature cannot be sued to enforce any benefit derived under the statute after it has been repealed. This is why under American (common) law social security and like benefits are not strictly contractual in their nature. But this doesn't mean that the statutory obligations are not enforced upon applicants as strictly as contractual obligations or that statutory obligations are not derived on the same principles as contractual obligations, with exception of an actual consideration. Consequently, you end up with a lopsided situation that cannot technically be called a contractual relationship, but at the same time is as powerful as a contract against the applicant.

I know, your already saying "So what is it." While the circumstance do not constitute a contract under American law, they would constitute a form of contract under Roman Civil Law. But even though this is so, I continue to caution calling the relationship contractual because it is not so in the first instance (upon application). Let me explain why I say it is a form of contract under Roman Civil Law. Most people that have done any legal research, or been involved in legal matters to some extent, are familiar with the term "stipulation." When we see this term we usually think of a courtroom situation, where two or more parties agree, (without necessity of proof) to a given fact or circumstance. Thereafter, the parties are bound by their agreement (stipulation) and may not contradict it, even if it is not true. Stipulations have no actual consideration involved but still carry with them the other obligations that might be attributed to an actual contract. The only exception I could think of where the "stipulation" could be avoided is where the party stipulating was induced by fraud to enter into the "stipulation" just like any other instance where the knowledgable consent of the party is required. It must be remembered that a key element of a contract's validity is also, knowledgable consent, as one could not justly be bound to something he never intended to agree to. Bouvier's Law Dictionary, 8th Ed., (1859) gives this definition of stipulation to verify what I said above about the Roman Civil Law recognizing a "stipulation" as a contract without actual consideration:

The definition goes on to state some instances of stipulations in courts with respect to bail, speaking most of admiralty courts, but pointing out that American admiralty courts do not follow the practice.

The applicant purposes the question, can I have the privilege. The agency answers in the affirmative by giving him a number and account. The stipulation is complete and statute and regulation can govern the relationship between the applicant and the agency and its affiliates thereafter and the applicant may not object. Why can't he object, because congress cunningly reserved the right to change the statute at any time. See the Social Security Act. ("RESERVATION OF POWER: Sec. 1104. The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress." - Title XI, section 1104, Social Security Act of 1935.).

With respect to whether social security is a contract, the most important point of the above definition is point "4" from 2 Bouv. Law Dict. (8th Ed.), In the case of a "stipulation", the Roman Law dispensed with an "actual consideration". American law of contracts requires an actual consideration. In order for it to be said that a specific contract requires an actual consideration, that consideration must be enforceable upon the opposing party (congress in the instance of social security). Because congress can repeal the social security act at any time, and because no one could sue to obtain benefits under the social security act if the act was repealed, social security does not define as a "contract" under American law. Therefore, the consideration most people contemplate to exist in the social security act does not "actually" exist. It tentatively exists, dependant solely upon the will of congress. Never the less, as long as the statute remains in force, parties may sue for benefits as provided by statute (giving the appearance of an actual consideration).