Social Security Gap for Those Born From ’17 to ’21 : Seniors Demand Equality for ‘Notch Babies’

“We’re going to protest this,” Alfred Golden angrily told about 80 elderly San Fernando Valley residents Wednesday. “We’re not going to take it lying down.”

Golden, program chairman of the Valley-based Seniors for Action, was speaking for “notch babies”--the 10 million people born from 1917 to 1921 who think the Social Security System is short-changing them.

Most of those gathered at the Van Nuys-Sherman Oaks Recreation Center for the weekly meeting of the seniors group indicated that they fall in that category.

Most of the meeting--and the news conference that preceded it--focused on efforts nationwide to increase benefits for notch babies.

“There’s only one way you’re going to get anything,” said Shirley Hagen, secretary of the Far West chapter of Notch Babies, a grass-roots lobbying organization that claims 5,000 members in Southern California.

“You’re going to have to fight. We are the fighting generation.”

Surplus in Trust Fund

Hugh S. Jenings, president of the Far West Notch Babies chapter, urged the seniors to write to Congress supporting legislation that would take money from the Social Security Trust Fund to finance higher benefits for notch babies. The trust fund has a surplus.

Hagen said the bill would cost the fund $5 billion a year.

But the Social Security Administration, which opposes the legislation, has said it would cost $195 billion in the first 10 years alone. And other advocates for the elderly, including the American Association of Retired Persons, say the surplus is needed for future Social Security beneficiaries.

The notch babies receive as much as $150 less in monthly benefits than those born from 1910 to 1916. Congress mistakenly caused the disparity in 1972 when it enacted a law guaranteeing that Social Security benefits rise with the cost of living, but mistakenly included a double adjustment for inflation. The error could have eventually bankrupted the system.

Retirement benefits are computed from wages and, under the 1972 formula, the value of those wages was automatically increased each year to keep pace with inflation. The benefits themselves were also raised for inflation, causing the double adjustment.

Social Security recipients born in 1916, for example, received benefits equal to 54% of their wages in the year before they retired. But those born before 1910, when the double adjustment went into effect, only received 41%.

Congress rectified its mistake in 1977 by phasing out the double adjustment over four years, beginning with people born in 1917. Consequently, the rates for those born from 1917 to 1921 are less than the 54% paid to some older retirees but more than the 41% paid to those born after 1921. Different people born in the 1917 through 1921 period get different benefit levels, from 54% to 41%.

The “notch” represents the gap in benefits between those born in the period of Jan. 1, 1917 through Dec. 31, 1921 and those born earlier. Jenings said this comes to $100 to $150 a month.

Golden read a letter Wednesday from Rep. Howard L. Berman (D-Panorama City), expressing his support for the legislation raising benefits for notch babies. Berman called their smaller payments “patently unfair.”

But Rep. Anthony C. Beilenson (D-Tarzana) opposes the legislation. He said that, if Congress increases benefits for notch babies, every person born after 1921 could rightfully claim his or her Social Security payments should also be raised.

“It’s not a question of the so-called notch babies being treated poorly,” Beilenson said. “It’s that we overcompensated older Social Security beneficiaries.”

Jenings urged the seniors to vote against any member of Congress who opposes increased benefits for notch babies.