Social Security Benefits: The Third And Fourth Rails Of American Politics

Published on

Over the last eight decades, Republican members of congress have futilely attempted to substantially lower Social Security benefits. Understandably, they were almost always punished at the polls, especially by older voters and their families.

The sanctity of these benefits soon became known as “the third rail of American politics.” Step on it and your political career is over.

Get The Full Henry Singleton Series in PDF

Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q3 2022 hedge fund letters, conferences and more


Find A Qualified Financial Advisor

Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes.

Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.

If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now.

Older Americans were especially hard-hit by the Great Depression of the 1930s. Their pensions were largely wiped out, their savings disappeared during the banking crash, and they couldn’t rejoin the labor force because there were very few job openings – especially for older workers.

And so, the elderly were the poorest population group in America. When the Democratically controlled Congress passed the Social Security Act in 1935 at the behest of President Franklin Rosevelt, it threw a very substantial lifeline to older Americans.

In subsequent decades, Social Security benefits would lift tens of millions of the elderly out of poverty. Indeed, for many these payments were their sole means of support.

The Third And Fourth Rail Of American Politics

But subsequent generations of Republican members of Congress – ostensibly in an effort to bring federal government spending under control – sought to make substantial cuts in Social Security payments. Too late, most of them learned that they had stepped on the third rail of American politics.

Whether or not they ever got the memo, most of these Senators and U.S. Representatives were unceremoniously voted out of office. While they might well have learned their lesson, often their successors would meet the same fate.

In 1965, President Lyndon Johnson presided over the creation of the Medicare and Medicaid programs which would provide largely government funded medical insurance to the large majority older and poor Americans. Again, it took sizeable Democratic majorities in Congress to pass this landmark legislation.

Of course, many Republicans opposed the law, which ensured that tens of millions of Americans could receive adequate medical care. Once again, Republican politicians would bitch and mown about how much these programs were costing and how they were nothing but “socialized medicine.”

But Medicare soon became extremely popular – as well as the medical insurance of choice of the overwhelming majority of older Americans. And from a political standpoint, it soon became the fourth rail of American politics. Republican members of Congress who opposed Medicare or wanted to cut benefits did so at great risk of stepping on the fourth rail.

Cuts In Social Security And Medicare Benefits

You would think that at some point, Congressional Republicans would finally realize that every time they propose cuts in Social Security and Medicare benefits, it can cost them very dearly. This is especially true since older Americans are much more likely to vote Republican than younger people.

The latest Republican to join the fight to cut Social Security and Medicare is Florida Senator Rick Scott, who just happens to be the Chairman of the National Republican Senatorial Committee. What is truly amazing about Scott’s plan is how transparent he is about potentially gutting Social Security and Medicare.

Scott is proposing a so-called sunset law for all federal government spending programs. Each would expire after five years, and then have to be renewed. The beauty of Scott’s plan is that it says nothing about cutting Social Security, Medicare, or any other spending program.

He hasn’t singled out any particular program for cuts or extinction. So, no one can accuse him of wanting to cut any specific program. All Scott really wants to do is force members of Congress to make their cases for any programs they want they do not want to be cut.

Think about that! Can you imagine having our Social Security program expiring if the Republicans have majorities in Congress? They might decide to pass a renewal of Social Security benefits, albeit with substantially lower monthly payments. Or, they may raise the minimum age requirement to collect benefits to 70.

Scott understands all too well his own duplicity. And so do his Republican supporters in the House and the Senate. He’s given them a way to get the job done without stepping on the third or fourth rails.

But it will not happen in the new Congress taking office on January 2nd. In fact, no such bill stands any chance of being passed until at least 2025 when a newly elected president and Congress will take office. In the meanwhile, President Joseph Biden would veto Scott’s master plan.  

So far, so good. But if the Republicans regain control of Congress in 2025 – and a Republican is elected president -- then we can look forward to a whole lot of Republicans stepping on those rails, and even living to tell about it at least until the next election.