We frequently hear the term "Third Rail" mentioned as a warning cry in political discussions on TV and in newspapers. What is this Third Rail in politics? Well, it's a metaphor for an idea that is so untouchable that it would be political suicide for any politician to consider changing or modifying in any way. Social Security and Medicare are definitely "Third Rail" topics.
Whichever political party seriously brings it up for modification will face a barrage of attacks that will overwhelm common decency and common sense. Politicians would rather bankrupt our county and carry this burden into future generations that they will not be around to see. They talk about ten year plans for keeping Social Security solvent as though some magical solution to solve all our problems will come about in some imaginary future.
My husband and I are retired and living on an income that is based on 40% Social Security and 60% pension and interest from annuities. I worked twenty-four years contributing into SS and another twenty-four years contributing into a state retirement plan. The amount I receive from SS is only $655 per month minus $96.50 for Medicare. My husband's SS is just under $20,000 a year minus his monthly charge of $96.50 for Medicare. We would find it difficult to live on SS alone and, due to a minimum amount of planning in our youth, we don't.
If politicians really wanted to "save" Social Security and Medicare they'd make the hard decisions - increase FICA contributions to ten percent over the next ten years, have people retire later, eliminate the $106,800 contribution cap. The truth is the Social Security Trust Fund doesn't exist as a pool of money sitting some place collecting interest. It is just an accounting tool to transfer money from current workers to people who are retired or on disability. The money collected from younger workers goes in one door and out the other to the retired or disabled. As long as there were more workers contributing more money than retirees needed, it seemed like a good idea - but there was a wrinkle in that plan.
Presidents since Ronald Reagan have also been borrowing some of the surplus of collected SS taxes and issuing big fat IOUs known as "special issue" bonds, supposedly with the intention of paying it back before it was needed. The government has been spending the surplus revenue from SS on anything from soup to nuts. It's not unlike borrowing from your kid's piggy bank and leaving a note.
Beginning in 2018 the federal government has to start paying back all the IOUs and in 2042, should nothing be done to prevent it, Social Security will go bust. Seniors and the disabled are not going to wake up the first day of 2042 to find themselves penniless, the pain is going to start much earlier. Should I live to be 100, I may see this all unwind. Very scary thought.
