Chairman JACOBS. Mr. Levin? Mr. LEVIN. No questions. Just to thank all of you who have been so patient. I know you would do that, Mr. Chairman. Chairman JACOBS. I tell you, our heart goes out to the people who come at the end of these hearings, and quietly to ourselves. Mr. LEVIN. There is obvious much difference of opinion here. And under the leadership of the chairman, this subcommittee has attempted to dip into that diversity and divergence. And as a tribute to you, Mr. Chairman, I think the subcommittee and the staff have done it effectively. We will take back for consideration more information as well as this richness of different views. So to all of you, thank you for joining us. Chairman JACOBS. Thank you all very much and good night. Mr. Chairman, first of all, I would like to thank you for holding this hearing. The notch is an issue that will not go away, and it deserves this public forum. I would also like to thank you for allowing me this opportunity to testify and express my desire to see the notch resolved once and for all. No other single issue has evoked as much reaction from my constituents as notch reform has. I have received thousands of letters and phone calls asking that this inequity in Social Security benefits be amended. Since my first days in Congress, I have been deluged with correspondence concerning the notch. Although my district includes a large number of senior citizens, I know my experience is not much different than that of my colleagues. While the notch gap may be portrayed as a bonus to those born prior to 1917--not a penalty to those born in the notch years--it is an inequity nontheless. It is time we face up to the fact that in 1977, in Congress' attempt to save Social Security, an unfair benefit formula was thrust upon an estimated 10 million Americans. Mr. Chairman, this body has a reputation as a place where fairness prevails. We must continue our commitment to fairness by not discriminating against those who were born between 1917 and 1921. Because of my quest for fairness, and the previously mentioned reasons, I have joined in sponsoring the major notch correction measures that have been introduced in the 100th Congress. I have signed on to both HR 1917 and HR 3788. As you know, both of these bills would go a long way towards increasing the monthly benefits of the so called "notch babies." These are people who have worked hard, and paid their fair share into the Social Security system. Now, because of the misfortune of being born at the wrong time, they don't recieve the same benefits as many of their peers. I need not explain to you the financial hardships that many of our elderly citzens have to face. The additional income that notch reform could provide might just be the insulation against certain poverty for many Social Security recipients. Sponsoring legislation is not the only way to confront this problem. I have also joined the Notch Coalition, which is composed of concerned Members of Congress, in order to help present a united front for the resolution of this problem. Mr. Chairman, it is my hope that Congress will soon enact legislation that will restore equality to millions of Social Security recipients. I also hope that this hearing will result in positive action so that we will no longer be faced with the notch dilemma. TESTIMONY OF REPRESENTATIVE FRANK ANNUNZIO BEFORE THE SUBCOMMITTEE ON SOCIAL SECURITY Mr. Chairman: I would like to take this opportunity to commend you for holding this hearing today on the Social Security "notch." The "notch" has generated much controversy, and this hearing will help to put the issue in proper perspective. In 1972, Congress double-indexed Social Security benefits to compensate for inflation. This formula, if retained intact, could have resulted in a situation where individuals retiring after the year 2000 would have received more in Social Security benefits than their pre-retirement earnings. To correct this oversight, Congress approved the Social Security Amendments of 1977, introducing a new benefit formula which reduced the earlier overcompensated benefit levels. However, to protect beneficiaries from abrupt reductions in their Social Security benefits, a five year transition formula was created. The original intent of Congress was to provide a modest initial decrease in benefit levels for this transition group over this five year period, and then to stabilize benefit levels for all Social Security recipients. Unfortunately, this stabilization did not occur. Instead, changes in the economy as well as a provision in the transition formula which excluded earnings after age 61 for those born in the "notch" years, resulted in a situation where some beneficiaries actually had their benefits reduced by as much as 24.18. Today, individuals born only days apart, and with the same work and salary histories, can have a disparity of monthly benefits of more than $160, because one was born in 1917 and one was born in 1916. Those born in the "notch" years, 1917-1921, contributed into the Social Security system and expected to receive their fair share of benefits. Over the years, they have contributed to the strength and greatness of America. As young adults, they struggled through the Great Depression, and many were called upon to serve their country and fight in World War II. They should not be penalized just because of their birth date. Over the last several years, thousands of my constituents, who were born in the "notch" years, have contacted me to express their deep concern about this inequity, and have called upon the Congress to correct this problem. I was glad to add my name as a cosponsor to H.R. 1917, the Social Security Transitional Benefit Computation Act of 1987, a bill to provide for a more gradual 10-year period of transition to the changes in benefit computation rules enacted in the Social Security Amendments of 1977, as they apply to workers reaching age 65 in or after 1982, born in the "notch" years. Mr. Chairman, these hearings serve to heighten public awareness about the Social Security "notch,' " and hopefully will lead to developing a solution to this problem. It is important that all Americans view Social Security benefits and taxes as fair, and I urge your Subcommittee to take the steps necessary to correct this "notch" inequity. ROBERT J. LEONARD, CHIEF COUNSEL. U.S. HOUSE OF REPRESENATIVES ROOM 1102 LONGWORTH HOUSE OFFICE BUILDING, WASHINGTON, D.C. 20515. RE: SOCIAL SECURITY TRUST FUNDS, "BABY BOOM" GENERATION. DEAR MR. LEONARD: PLEASE ACCEPT FOR THE PRINTED RECORD THIS INFORMATION, THANK YOU. THOSE BORN 1910 THROUGH 1916 are NOW RECEIVING WIND FALL BENEFITS, A CONGRESSIONAL ERROR BY CONGRESS IN 1977.. THOSE BORN 1917 TO 1921, OR LATER HAVE NOT RECEIVED EQUAL BENEFITS UNDER THE LAW, AND THIS WILL CONTINUE UNTIL THOSE BENEFITS ARE DECREASED OR INCREASED. TWO WRONGS DO NOT MAKE IT RIGHT AS THE CONSTITION DOES STATE THAT ALL AMERICANS BE TREATED EQUAL. CONGRESS MADE TWO ERRORS, LET US GO FOWARD AND CORRECT THE "NOTCH" ONCE AND FOR ALL. RESPECT FULLY YOURS, BennelBerk 5/17/87 BERNARD BECK 44 APPLE LANE, R. R. #2 BOURBONNAIS, ILL. 60914 P.S. I WOULD APPRECIATE A CONFIRMATION THAT YOU HAVE RECEIVED THIS COMMUNICATION. TESTIMONY OF REP. MARIO BIAGGI (D-NY) BEFORE Mr. Chairman. HEARING ON "NOTCH" ISSUE April 14, 1988 I would like to thank you for allowing me the opportunity to present testimony today on the "notch" issue which has become a matter of great concern to my own Congressional District in New York, but also to over ten million seniors across our nation. As an original Member of the House Select Committee on Aging, I congratulate my colleagues and members of the Subcommittee on Social Security for expeditiously calling this hearing so soon after the release of the long awaited GAO report on the "notch" problem. It is my hope that the hearing today will lead us a little closer to a feasible solution to the economic disparity that plagues so many elderly people and which should be corrected. Having read the GAO report, I am happy to learn that we are in agreement that the "notch" problem does exist, and that the benefit differences are significant in dollar amounts. I was also pleased to see that the GAO report confirmed that the Social Security trust funds have a growing surplus, which would be more than sufficient to cover the costs associated with rectifying the notch problem. However, as a Member of Congress who receives and has been receiving approximately 50 letters per day from seniors in my district on this subject, I was greatly disappointed to learn that GAO has failed to endorse any specific legislative solution to this problem. I have been an original co-sponsor of H.R. 1917 for the past two Congresses, introduced by my colleague, Rep. Edward Roybal (D-California) Chairman of the House Select Committee on Aging. I still strongly support H.R. 1917, which would replace the current five year transition formula with a transition period of 15 years for maximum earners, and 28 years for average earners. I know that this legislation would result in the replacement of lost benefit levels to those who fall within the 1917 to 1921 categories. It has been stated by some Members of Congress as well as GAO that there are too many costs associated with notch reform. It is my feeling that those who have cited these costs are merely waving a red flag since, as I stated before, the Social Security trust funds are more than sufficient to meet these costs. I am happy to report that the GAO report confirms the trust fund surpluses to be approximately over $65 billion at the present time. It is expected to reach $260 billion by 1991. The worst case scenario of notch reform is $82 billion. When Congress initiated the legislation that created the now notorious "notch problem", it was in an effort to stabilize replacement rates and lower their level. But, by doing so, many retirees born in 1917 and thereafter received smaller benefit amounts than those born just before them. Examples have been cited of members of the same family, brothers or sisters, who worked together for approximately the same pay for the same amount of time, but because of the differences in their birth dates, one receives a smaller monthly check. This is discrimination as far as I am concerned, and I am not comfortable as a legislator turning my back on this type of discrimination, which victimizes the pocketbooks of senior citizens. I believe it is the responsibility of Congress, who created I think it is about the problem, to rectify it once and for all. time we make the effort to recompense those seniors who are affected in an equitable manner. Thank you for allowing me to present testimony at this very important hearing. ### |