I recently got an email from a reader that made me think about my mom. She died about 15 years ago. And sadly, she went to her grave with a huge Social Security chip on her shoulder. Despite my constant reassurances to the contrary, she was convinced that the government was short-changing her —cheating her out of Social Security benefits she felt she was due. For you see, she was one of the so-called “notch babies.” My mom, and millions of other seniors in her age group, had been misled — by a rather sophisticated lobbying campaign — into believing that they were getting smaller Social Security checks than anyone else.
Frankly, most of the notch babies, like my mom, have long since passed away. But the email I mentioned came from a reader who reminds me that some of these folks are still alive and kicking, and they are still carrying a grudge. He wrote, “My mom, who is 95, was one of the notch babies. To say she is ticked off at the government is putting it mildly! Is there any chance Social Security will ever give back the money they stole from her?”
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 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 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 his or her 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, it 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, it eventually decided that everyone born between 1917 and 1921 would have his or her benefit figured using a special formula.
Thus: People born after 1921 had their benefits figured using the proper (and lower) COLA formula; people born before 1917 had their benefits figured using the incorrect (and higher) formula; and people born between 1917 and 1921 had their benefits figured with a special formula 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 in 1917 and later started to complain that they weren’t getting quite as much as folks born 1916 and earlier. Someone should have splashed some cold water in their faces and said, “Stop your griping! You are being paid correctly. It’s the folks born before 1917 who are getting overly generous benefits.”
Instead, mobs of angry senior citizens around the country started to form into groups demanding justice. Even Ann Landers got into the fray, labeling people born between 1917 and 1921 “notch babies.” They mistakenly thought they were singled out for lower benefit adjustments than everyone else. To repeat the facts: They were getting slightly lower benefits than people born 1916 and earlier, but they were getting higher benefits than everyone born from 1922 on.
Then lobbying groups 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 craftily 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 on K Street in Washington, D.C. — but money that accomplished nothing else. After all, there really 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. Those still alive believe to this day that they are being cheated out of Social Security benefits. Shame on all those folks who created this myth. And my sympathies go out to those people who bought into it.
