About once every two years or so, I write a column about Social Security’s infamous “notch baby” issue. And each time, I think it will be my last such column because these so-called babies are actually now centenarians or darn near it — and frankly, there just aren’t many of them around anymore. But if some recent emails I’ve received are any indication, a few of them are still kicking, and they’re still hopping mad!
So who am I talking about? They are a group of people who are now in their 90s and beyond who, for decades now, have been misled into believing that they are being cheated out of Social Security benefits. That means that for 30 or 40 years, they have been carrying a grudge against the government in general, and Social Security in particular. As I said, I still get letters from these people. Or I get emails from their sons or daughters (who themselves are now in their late 60s or 70s), asking me if anything can be done about this perceived injustice.
This cohort of seniors is 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 lobbying campaign sponsored by greedy gadflies out to make a quick buck.
For those readers who don’t have a clue what I am talking about, the “notch” refers to a time period when corrections were made to the Social Security benefit formula — corrections that were necessary to ensure all Social Security recipients were paid properly. But these corrections 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 came up with a formula for calculating increases to people’s Social Security checks. But after COLAs were paid for a couple of years, someone noticed the formula was wrong. Social Security beneficiaries were getting increases that were 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. The second choice Congress had to make was where to draw the line in order 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 his or her Social Security benefits 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 his or her benefit figured using a special formula.
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 much as folks born in 1916 and earlier. Someone should have pointed out to them that they were being paid correctly. Although the folks born before 1917 were getting overly generous benefits, they were getting Social Security benefits at a higher rate than anyone born from 1922 on.
Sadly, millions of seniors born between 1917 and 1926, or even later, went to their graves bitter and disappointed. Those still alive believe 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.