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Legislative Update: Notch Babies Saved Social Security Isn`t It Their Turn Now? By Michael Ouellette, Legislative Director, TREA Senior Citizens League One of the most positive accomplishments of the 106th Congress and President Clinton has been the agreement to aside a portion of the budget surplus in order to "save Social Security." There was another time in the past when Social Security needed to be saved. In 1977, Notch Babies became the ones called upon to do the job. That was the year in which Congress changed the way in which Social Security benefits were calculated beginning with retirees born in 1917 and eligible to retire in 1979. The 1977 legislation corrected an earlier 1972 benefit formula, which raised benefits too quickly. Without the changes, Social Security would have become insolvent by 1981. Retirees who were first in line for the 1977 changes "paid the price" of saving the system by receiving lower benefits. Those affected by the 1977 law changes had substantially lower benefits than those born in 1916 and years prior. Even critics who dispute the existence of the Notch agree upon that point. Those benefit differentials did not begin to level out for ten years-until those who were born in 1927 and thereafter. Notch Reform efforts have met strenuous opposition in the past-primarily over cost, but the government's bottom line has changed dramatically in recent years. In addition, we also now have a legislative solution, "The Notch Fairness Act," which is estimated to cost $41.5 billion, far less than the previous versions of Notch Reform legislation. Our government has never been in a stronger financial position to compensate those affected by the Notch for their sacrifice. According to the Congressional Budget Office (CBO), the total budget surplus for fiscal year 2000 (ending in September) may reach $232 billion. More importantly, the non-Social Security portion of the surplus is expected to reach $84 billion. In addition, the CBO projects that the total non-Social Security budget surplus will grow to more than $2 trillion over the next 10 years. Such lofty levels of total budget surpluses have been approached only once since World War II in 1948. Notch babies are among beneficiaries hardest hit by rising prescription drug costs. In addition, health care premiums are expected to rise from 11-30% in 2001. The cost of heating fuel, remains high-a troublesome burden for many seniors. Long-term care insurance is virtually unaffordable. Where is the money going to come from? Haven't Notch Babies paid the price long enough? Isn't it time that our government gave back to those who saved Social Security for all the rest of us? Let's share this with newly elected Members of Congress and the President-elect-"Notch Babies saved Social Security then, let's make Notch Reform a top priority now!" This article first appeared in Volume 6, Issue 1 of "The Social Security and Medicare Advisor" newsletter (November/2000). To receive future editions of "The Advisor" in its special, free e-mail version, please click here. | ||||||||
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