2002-05-11 / Columnists

Social Security: What’s New; What’s Not; and, What’s Notch? Part Three Notch: An Issue Without a Home

By Congressman Gregory W. Meeks (NY)

Social Security: What's New; What's Not; and, What's Notch?
Part Three
Notch: An Issue Without a Home
By Congressman Gregory W. Meeks (NY)

This is the third and last article in a three part series on Social Security. In part one, I flushed out the debate on Social Security Reform–focusing primarily on privatization. Part two of this three part series focused on the concept of a "lock-box" and its effect on securing left over tax revenue from the cost of Social Security benefits. Part three will focus on the "Notch babies" issue.

It is my hope that this three part series served as an education tool as well as the catalyst to spark the debate around Social Security among the residents of the 6th Congressional District.

On the trend towards privatization, it is critically important that Americans fully comprehend the human, financial and political costs of moving this entitlement system, which depends solely on the contribution of workers to thrive, toward one based on the whim of the market and the integrity of corporate entities. The projected impact of such a system on women, minorities and those currently contributing to the system could be exponential in its devastation.

The greatest proponents of privatization have had to admit that they are unable to conceive of a plan to implement a partial or total privatization scheme that would not dismantle the system and result in existing beneficiaries losing their benefits. The House is expected to debate and consider a measure this week to bolster the confidence of the system– as a prelude to privatization– by legislating enrollees access to benefits. Smoke screen at best!!! We can only provide benefits that we can pay for and we can only pay for benefits with funds contributed into the system.

On the "Lock-box," we have established that surplus Social Security dollars can neither be contained nor protected. Although various pieces of legislation have been proposed to protect the surplus, not one has reached the stage of law. In order to protect the system, Congress often times must intervene on a legislative level Congress has, for years, tried to mitigate the impact of statutory changes on beneficiaries of Social Security. Because of its entitlement status, major changes to the Social Security program must be in the form of a law. Congress has entertained the prospect of revising the age of retirement and sought to recalculate cost of living adjustments. In 1977, Congress sought to correct, by law, a flaw in the Social Security benefit formula. As a result of this legal action, Congress created and has been struggling with the "Notch babies" issue.

I am going to take some time to single out the "Notch" issue, as I am aware of its great interest among the seniors in our District. In 1977, Congress set out to adjust the Social Security benefits calculation to account for wage growth and inflation indexing problems. Without the adjustments, some beneficiaries would have entered the system with benefits that exceeded the earnings they had in their last year of work. The changes became effective beginning with people who became eligible for Social Security benefits in 1979. However, many complained that the changes caused benefit disparities between those born within the 5-15 year period after 1916 (notch babies) and those born before and after them. After much debate, Congress mandated a Commission to study the "Notch babies" controversy, which released its report in December 1994. The Commission concluded that "benefits paid to those in the "Notch" years are equitable, and no remedial legislation is in order."

Many legislative initiatives have been introduced in Congress since 1981– up to and including this current Congress– to address the "Notch" issue. Many NGO's (non-governmental organizations) as well as retiree associations have proposed dollar figures to compensate for the "Notch" dilemma. It is important to note that none of the legislative initiatives have become law. In spite of the many predictions around how much is adequate compensation for beneficiaries and spouses, they are just that: predictions. The government has not agreed to any compensation scheme and, at this time, has not passed any laws to address the "Notch-babies" complaints.

I am planning a neighborhood seminar on the "Notch-babies" issue. I have received many inquiries on the issue and have instructed my staff to conduct a survey of legislative activities around the issue and bring this information to the constituents.

It is my hope that I have generated a debate around Social Security reform that highlights the thoughts and the will of the residents of the 6th Congressional District. In light of the "lock box" phenomenon and its effectiveness toward solvency of the Trust Fund, the debate should prove rich and rewarding. This will be, perhaps, one of the most significant and far-reaching legislative initiatives undertaken by the Congress this year. If real reform of the Social Security system is to take place, then we must provoke a spirited debate among ourselves– between those who currently contribute, and those who currently receive benefits. In the wake of ENRON, privatization must reflect sensitivity for the need to have guaranteed funds to keep the system afloat.

As I develop my position on the future of Social Security and what reform scheme is feasible– if any, I want the input of my constituents so we reflect both the times and the tradition of maintaining our quality of life in the golden years.

For additional information on the Social Security reform issue, "lock boxes", Notch-babies, or any other Social Security related issues, please contact any one of my offices and staff will provide further information.


Return to top


Email Us
Contact Us

Copyright 1999 - 2014 Wave Publishing Co. All Rights Reserved

Neighborhoods | History

 

 

Check Out News Podcasts at Blog Talk Radio with Riding the Wave with Mark Healey on BlogTalkRadio