Social Security and You: A COLA Gift From Congress Few Seniors Know About
I wonder if any of my readers have thought about this. Why did you get the 2022 cost-of-living increase in your January Social Security checks? After all, that check you get in January is the Social Security payment for December. In other words, you get your first 2022 COLA increase in your December 2021 Social Security benefit. So why is that? Well, it has to do with the power of the senior citizen lobby in this country. When old folks gripe about something, especially when it comes to Social Security, Congress can't act quickly enough to make them happy. And this business about getting the COLA one month early is a good example of that.
Automatic annual cost-of-living adjustments to Social Security checks first started in 1975. (Prior to that, it took an act of Congress to hand out increases in Social Security benefits.) And when those automatic COLAs started, they were always properly paid in the January Social Security check that was sent to folks in February. And for the first several years, people just accepted this procedure.
But then in the early 1980s, seniors began to complain. They griped, "Why do I have to wait until February to get my first COLA increase for the year?" Someone should have simply explained to the grumbling geezers that they were getting the increase properly and on time. They were getting the COLA in their January checks paid in February.
But that's not how things work when it comes to placating riled-up senior citizens. Explanations weren't in order. Instead, legislation was called for. So, in 1983, Congress passed a law saying that seniors would get their COLA increases in January of each year -- in effect, one month early. Problem solved. Grandma and Grandpa are happy!
I can think of dozens of other times when Congress jumped to fix a perceived Social Security problem just to keep senior citizens happy. I only have space in this column to share one more.
And this one also has to do with the annual COLAs. As part of the process for establishing the automatic COLAs back in the 1970s, the Social Security Administration had to come up with a formula for calculating increases to people's Social Security checks -- which they did. But after COLAs were paid for a couple of years, someone noticed the formula was wrong. Social Security beneficiaries were getting increases that were slightly higher than the law intended.
Once the mistake was discovered and the SSA notified Congress, several decisions had to be made. For one, they had to figure out what to do about all the Social Security beneficiaries who received the overly generous COLA adjustments. Congress decided to let them keep the money. (It would have been political suicide to send "overpayment" letters to every senior citizen in the country demanding repayment of the incorrectly paid funds.)
The second choice Congress had to make was to decide where to draw the line -- to figure out which people would have their benefits figured using the proper COLA formula. And they drew that line at 1917. In other words, they said everyone born in 1917 and later would have his or her Social Security benefit figured using the corrected formula.
Sounds simple enough, doesn't it? But once again, Congress bowed to pressure from senior citizens born after 1916 who griped that they were getting lower benefits than their older peers. So, Congress decided to set up a transition period from the old (incorrect) formula to the new (proper) formula. They said that everyone born between 1917 and 1921 would have his or her benefit figured using a special formula.
So, we ended up with the following scenarios. People born after 1921 had their benefits figured using the proper (and lower) COLA formula. People born before 1917 had their benefits figured using the incorrect (and higher) formula. And people born between 1917 and 1921 had their benefits figured with a special formula not quite as generous as the one used for the pre-1917 crowd but more generous than the one used for the post-1921 crowd.
You'd think everyone would be happy, right? Well, what happened next was pretty bizarre. Social Security recipients born in 1917 and later started to complain that they weren't getting quite as much as folks born in 1916 and earlier. Someone should have splashed some cold water in their faces and said, "You are being paid correctly. It's the folks born before 1917 who are getting overly generous benefits. And on top of that, you are getting Social Security benefits at a higher rate than anyone born from 1922 on."
Instead, mobs of angry senior citizens around the country started to form into groups demanding justice. Even advice columnist Ann Landers got into the fray. She's the one who came up with the infamous moniker: "notch babies." And all these so-called notch babies mistakenly thought they were singled out for lower benefit adjustments than everyone else. To repeat the facts: they were getting slightly lower benefits than people born 1916 and earlier, but they were getting higher benefits than everyone born after 1921.
Then greedy lobbying groups got into the mix and really muddied things. They sent letters to folks born in the so-called "notch years" telling them they were being cheated out of Social Security benefits and asking for donations to "fight this injustice." And to help fill their coffers even more, the lobbyists deceitfully expanded the definition of those notch years to include everyone born through 1926. Some inexplicably even pushed the notch cutoff into 1930s dates of birth! So senior citizens of all ages started sending in tens of millions of dollars -- money that paid for many overpriced lobbyists and some pretty nice office space on K Street in Washington, D.C., but money that accomplished nothing else. After all, there really was no "injustice" to fight.
Sadly, millions of seniors born between 1917 and 1926 or even later went to their graves bitter and disappointed -- including my own mother! Those few who are still alive believe to this day that they are being cheated out of Social Security benefits. If you know one of these people, please tell them to enjoy what time they have left on Earth and stop fretting about an alleged injustice that never happened.
If you have a Social Security question, Tom Margenau has a book with all the answers. It's called "Social Security -- Simple and Smart." You can find the book at www.creators.com/books. Or look for it on Amazon or other book outlets. To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.