When in Doubt, Examine the Record

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When in Doubt, Examine the Record

Notch Reform remains hotly contested. The Social Security Administration (SSA) and some Members of Congress continue to say that the Notch doesn't exist. They insist that Notch Babies were treated fairly and receive all the benefits that Congress intended. Certain Members of Congress have even gone so far as to reason that because the Notch (supposedly) doesn't exist, that organizations that lobby to correct it are misleading seniors.

Some Notch Reform advocates contend on the other hand that "misleading" seniors may also describe some of the government's information about the Notch. A Social Security Administration fact sheet, for example, says that in 1977 "it (Congress) wanted to avoid an abrupt change for those about to retire so it provided for a phase-in or transition period."* What the fact sheet fails to mention, advocates say, is that the transition was not phased in but was very abrupt. According to the non-partisan Congressional Research Service (CRS), "transition rules were designed to put the new system in place quickly." The CRS further states, "the new benefit rules were expected to apply to 57% of new retirees in the first year of the changeover. By the third year, the new rules would apply to 82% of new retirees, and by the fifth year to 92%."**

What was not anticipated were the economic conditions that emerged following the 1977 changes that caused a far greater disparity in benefits than expected. Inflation jumped from about 6% to 13-14%. Wage levels did not keep up with inflation. According to the CRS, "for age 65 retirees (with a record of average wages), a maximum benefit disparity of 10% would have arisen between the highest benefit under the old rules and the lowest benefit under the new rules if the 1977 assumptions had materialized. Under the economic conditions that actually arose the disparity was 25%."**

TSCL continues to maintain that because economic conditions did not perform as expected, those affected by the Notch could NOT have received all the benefits that Congress intended. The Notch does exist. TSCL members rank Notch Reform as our number one legislative priority. More importantly, 108 Members of Congress also believe the Notch exists. They have co-sponsored Notch Reform legislation. We urge you to contact your Members of Congress, especially your Senators, make them aware of the facts, then ask them to enact The Notch Fairness Act now.

*"The Notch What It Is…And What It Isn't," fact sheet from the Social Security Administration, SSA Publication 05-10042, May 1993.
**CRS Issue Brief "Social Security Notch Debate," by David Koitz and Geoffrey Kollmann, updated February 24, 1995.

To sign our online Petition to the U.S. Senate for the $5,000 Notch Victim Settlement, click here: http://action.tscl.org/NotchVictimsSettlement.asp.

May 2002