Benefit Bulletin: October 2011

Benefit Bulletin: October 2011

Notch Babies were the group of seniors on the receiving end of major changes to the Social Security benefit formula that Congress enacted in 1977. Retirees born from 1917 through 1926 received lower Social Security benefits than other retirees with similar work and earnings records — an inequity that’s been well-publicized and debated over the years.

Less well understood is how Notch Babies were impacted by technical changes that the government made, at the time of the 1997 Balanced Budget Act, to the methodology used to calculate the consumer price index (CPI). The CPI is used to determine annual cost-of-living adjustments. Those changes reduced the measured rate of inflation by about 0.7 tenths of a percentage point, according to the Congressional Budget Office.

Those so-called “technical improvements” also resulted in trimming the Social Security benefits of all seniors who were retired in 2000. From 2000 through the end of 2011 benefits grew 6% more slowly, according to an analysis for TSCL. For a Notch Baby with an average monthly benefit of $816 in 2000, the loss is estimated to be $5,282 through the end of 2011.

TSCL continues to work with Members of Congress to pass “The Notch Fairness Act,” legislation which would provide Notch Babies born 1917 through 1926 with a settlement of $5,000 or a choice of higher monthly benefits.

What you can do: Urge your Members of Congress to co-sponsor and pass “The Notch Fairness Act, ” H.R. 1001 and S. 118! To learn more about the status of Notch legislation, visit TSCL on the web at or call 1-800-333-8725.

Sources: “Impact of 1997 CPI Changes,” Mary Johnson, TSCL, August 10, 2011.
“Changes in Calculating the Consumer Price Indexes,” Congressional Budget Office, September 1997.