The Public Policy

Breaking the Third Rail

Entitlements are broken and a once-impossible debate over retirement is finally happening. But will it matter?

By 10.28.13

Social Security, Tip O’Neill once observed, is the third rail of politics. Lawmakers who touched the venerable retirement insurance program, or its cousins Medicare and Medicaid, were said to be zapped to death on the spot. This was the case as recently as 2005, when President Bush tried to pass incremental reforms to Social Security. Democrats rallied the public, the proposal flamed out, and Bush’s domestic agenda suffered its most serious setback.

But lately, not only is criticizing entitlements not a political death kiss, it’s actually become a necessity in Republican politics. Mitt Romney had a plan to reform Social Security; during one of the GOP primary debates, Rick Perry one-upped him by calling the entire program a Ponzi scheme. Such critiques send liberals into fits of apoplexy, but that hasn’t stopped many conservatives and pragmatists from trying to address the safety net’s growing problems.

This determination has remained steady through the toughest political circumstances. After Republicans were politically drubbed during the recent government shutdown, their impulse might have been to play things safe for a while. But that didn’t stop Rep. Paul Ryan from saying that he was going to pursue entitlement reform in the coming year.

Ryan, soft-spoken and wonky, has nevertheless been a bulldog when it comes to fixing Social Security and Medicare. His Roadmap to Prosperity, now considered the flagship Republican plan on entitlements, goes easy on Social Security, but makes significant changes to shore up the more urgently crumbling Medicare program. Under Ryan’s plan, the Medicare retirement age would be raised from 65 to 67. Enrollees would receive a premium-support voucher, the value of which would be determined by a competitive bidding process that would drive down costs.

Ryan’s plan is stalled thanks to an obstructionist Democratic Senate. It’s also been hysterically attacked by just about every economic liberal in Washington, and mislabeled as everything from back-door privatization to an overt attempt to end Social Security. In fact, whatever its flaws, it’s a sober and rational attempt to bring the program in line with the realities of exploding costs and a senior citizenry that’s living longer than ever before. It’s also the most conservative plan on the market today, short of ending Social Security altogether.

Another solution popular among some Republicans is to means-test Social Security and Medicare. This would distribute benefits on a progressive sliding scale according to lifetime income. Means-testing offers some promising savings; one scheme would allegedly shave off a tenth of Social Security spending over the next decade. But it would also transform entitlements from individual retirement savings accounts (at least in theory) to overt welfare program. Social Security and Medicare, in other words, would cease to be Social Security and Medicare.

That might sound like an unacceptable outcome, and to much of the public, it is. Americans still remain supportive of Social Security and generally oppose any efforts to tinker with it. But the fact that such solutions are even being proposed shows how much the paradigm has shifted. Even the Simpson-Bowles commission, that edifice of august centrism and Washington collaboration, proposed raising the retirement age and cutting benefits.

Others on the center-left worry that retirement itself is threatened and needs to be shored up. Between a general reluctance by many Americans to prepare for retirement—half of workers aren’t saving at all; only 57 percent have more than $25,000 saved—and entitlements crumbling from lack of funding, some are worried that the money just won’t be there for senior citizens. This problem is compounded by the fact that Americans are living longer than ever before—on average, 79 years, more than 10 years longer than when Social Security was first established.

A bipartisan group of thinkers and politicos, including Kathleen Kennedy, wants states to set up their own retirement insurance programs to complement Social Security and bolster seniors’ dwindling savings accounts. They believe this could be palatable to conservatives as well, since it respects the federalism scheme by acting at the state level.  Such a plan could have limited appeal in states with booming economies, like Texas or North Dakota. But for other states, buckling under the weight of huge deficits, it would be a harder sell.

Whatever the merits of any of these plans, we must ultimately end on a sour note. Social Security may no longer be the third rail, but it’s still got a little juice running through it and few lawmakers seem willing to tinker with it in any meaningful way. That leaves the country stuck with a doomed retirement program, bleeding red ink, compulsory and impossible to escape, guarded fiercely by demagogues who refuse to accept reality.

“I don’t think I’m really going to retire,” a friend told me not long ago. “I think I’ll work until the day I can’t anymore, honestly, out of necessity.” Given the direction entitlements are headed, he and many others may not have a choice.

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Matt Purple is an editor at