A bipartisan commission says Congress should take no action on behalf of the "notch" generation, 6 million retired Americans who are convinced they get less than they deserve from Social Security.
Congress created the 12-member commission in 1992 to investigate claims that Americans born between 1917 and 1921, the so-called notch years, were getting lower retirement benefits than other Social Security recipients.But the panel said Thursday that benefits paid to those "notch babies" - about 6 million Americans now between ages 73 and 77 - are equitable and that no changes are needed.
"To the extent that disparities in benefit levels do exist, they exist not because those born in the `notch' years received less than their due; they exist because those born before the `notch' years . . . continue to receive substantially inflated benefits," the commission said. "This disparity has created an understandable perception of unfairness."
The American Association of Retired Persons, the nation's largest seniors advocacy group, endorsed the commission's findings.
"To give in to the unwarranted demands of a group of beneficiaries would have threatened the fiscal soundness of Social Security for all generations," the AARP said. "It would also have weakened long-term support for the program, ultimately harming all Americans."
The AARP said the notch proposals would have siphoned off Social Security's accumulating trust fund reserves, which cushion today's retirees against an economic downturn and will help finance retirement benefits for the baby boom generation.
The notch refers to a dip in a graph representing retirement benefits to seniors born between 1917 and 1921.
It had its origins in the 1970s, when Congress changed the way it calculated Social Security benefit levels. Lawmakers made a flawed decision that allowed people born between 1910 and 1916, just before the notch, to collect unduly large benefits.
The commission confirmed that many in the notch years receive lower benefits than many of those born a few years earlier.
For many notch retirees, the statistics are bolstered by personal knowledge of large inconsistencies between their benefits and those reported by friends, neighbors and relatives with similar wage histories, the commission said.
"In light of these findings, the perception of those in the `notch' years that they have been unfairly treated is entirely understandable," the panel said. "Nonetheless, the commission finds that such is not the case."
Notch retirees' benefits represent a generous return relative to the Social Security taxes they paid during their working years, which will be less true for future recipients, the commission said.