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Babies of "Notch Babies"

This is going to be a column about the infamous "notch babies." I thought this issue had died, because frankly, almost everyone affected by this glitch in Social Security law has died. (The few still alive would be over 100 years old.) But amazingly, I am now hearing from the babies of notch babies! In other words, people now in their 70s are writing to me about an issue that affected their parents. Here is a typical example.

"I've always been curious about something. My mom, who would have turned 100 today if she were still alive, always complained that she was being cheated out of Social Security benefits because of something called "the notch." In fact, she called herself a "notch baby." I know it's too late to do anything about it, but can you explain what that was all about?"

Yes, I can explain. This cohort of now mostly deceased Social Security beneficiaries are generally people born between 1917 and about 1926. And their false claims about getting financially fleeced by Uncle Sam were fueled by a rather sophisticated, albeit deceitful and shameful lobbying campaign, sponsored by greedy gadflies out to make a quick buck.

The infamous "notch" refers to a time period when corrections were made to the Social Security benefit formula -- corrections that were necessary to ensure that all Social Security recipients were paid properly, but corrections that were misconstrued by many to be a way of cheating them out of benefits they felt they were due. Here's the story.

In 1972, Congress passed a law mandating automatic annual cost-of-living adjustments -- or COLAs -- to Social Security checks. Those COLAs were to be based on increases in the government's official inflation measuring stick: the consumer price index. (Before 1972, COLAs were not automatic. They were sporadic and happened only if Congress specifically authorized a yearly increase.)

As part of the new process, the Social Security Administration had to come up with a formula for calculating increases to people's Social Security checks -- which they did. But after COLAs were paid for a couple of years, someone noticed the formula was wrong. Social Security beneficiaries were getting cost-of-living increases that were slightly higher than intended.

Once the mistake was discovered and SSA notified Congress, several decisions had to be made. For one, they had to figure out what to do about all of the Social Security beneficiaries who received the overly generous COLA adjustments. Congress decided to let them keep the money. (It would have been political suicide to send "overpayment" letters to every senior citizen in the country demanding repayment of the incorrectly paid funds.)

The second choice Congress had to make was to decide where to draw the line -- to figure out which people would have their benefits figured using the proper COLA formula. And they drew that line at 1917. In other words, they said everyone born in 1917 and later would have their Social Security benefit figured using the corrected formula.

Sounds simple enough, doesn't it? But sometimes Congress can't leave well enough alone. In this case, they bowed to pressure from senior citizen groups who demanded a transition period from the old (incorrect) formula to the new (proper) formula. After lots of haggling, what they eventually decided was that everyone born between 1917 and 1921 would have their benefit figured using a special formula.

So, we ended up with the following scenarios. People born after 1921 had their benefits figured using the lower, but proper, COLA formula. People born before 1917 had their benefits figured using the higher, but incorrect, formula. And people born between 1917 and 1921 had their benefits figured with a special formula that was not quite as generous as the one used for the pre-1917 crowd but more generous than the one used for the post-1921 crowd.

You'd think everyone would be happy, right? Well, what happened next was pretty bizarre. Social Security recipients born between 1917 and 1921 started to complain that they weren't getting quite as generous a COLA as folks born in 1916 and earlier. Someone should have pointed out to them that they were indeed being paid at a special rate that was lower than the incorrect benefits paid to the pre-1917 crowd, but at a higher rate than anyone born from 1922 on.

Instead of listening to reason, mobs of angry senior citizens around the country started to form into groups demanding justice. Even advice columnist Ann Landers got into the fray. She's the one who came up with the moniker: "notch babies." And all these folks mistakenly thought they were singled out for lower benefit adjustments than everyone else.

Then those greedy lobbying groups I mentioned earlier got into the mix and really muddied things. They sent letters to folks born in the so-called "notch years" telling them they were being cheated out of Social Security benefits and asking for donations to "fight this injustice." And to help fill their coffers even more, the lobbyists deceitfully expanded the definition of those notch years to include everyone born through 1926. Some inexplicably even pushed the notch cutoff into 1930s dates of birth! So senior citizens of all ages started sending in tens of millions of dollars -- money that paid for many overpriced lobbyists and some pretty nice office space in Washington, D.C. -- but money that accomplished nothing else. After all, there was no "injustice" to fight.

Sadly, millions of seniors born between 1917 and 1926 or even later went to their graves bitter and disappointed -- including my own mother, by the way! Those very few still alive believe to this day that they are being cheated out of Social Security benefits. If you know one of these people, please tell them to enjoy what time they have left on earth and stop fretting about an alleged injustice that never happened. Or if you are the child of a deceased "notch baby," please rest assured that your parent wasn't cheated out of anything.

If you have a Social Security question, Tom Margenau has two books with all the answers. One is called "Social Security -- Simple and Smart: 10 Easy-to-Understand Fact Sheets That Will Answer All Your Questions About Social Security." The other is "Social Security: 100 Myths and 100 Facts." You can find the books at Amazon.com or other book outlets. Or you can send him an email at thomas.margenau@comcast.net. To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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