Melted Plastic On Steering Column/shaft

Hey guys, i have a 98 gt and yesterday after coming home from school i noticed small streams of smoke coming from cluster/steering wheel area but thought i was just seeing things since i was tired...and the amount of smoke wasn't that noticeable. I drove to the liquor store later that that evening to get gas and sat with the car on for a while when i got home just to double chek, and there was nothing. Today, as i got home i kept the car running and sure enough i saw the smoke(still barley noticeable). It didnt really smell like anything burnt but i quickly shut the car off and took out my cluster to inspect[/IMG] ... everything was fine. Then i went under the dash to chek out all the wires and everything was good except for this white plastic ring looking thing(melted) which is a part of what i think is the contact assembly on the steering column. I dont know much about steering assemblies and any help on why its melting and/or if its safe to remove. Any help would be appreciated.
(Pics)