Key facts
- Sen. Bill Cassidy (R-La.) proposed investing $1.5 trillion over five years into a separate fund to reform Social Security.
- The investment fund is designed to grow over 65-70 years to cover 60-65% of Social Security's unfunded accrued liability.
- Cassidy stated that the fund would bear all investment risk, ensuring promised benefits for recipients.
- The Social Security OASI Trust Fund is projected to be able to pay 100% of scheduled benefits until the fourth quarter of 2032.
- After 2032, the OASI fund is expected to cover 78% of its total scheduled benefits.
Senator Bill Cassidy (R-La.), who recently lost a GOP primary to a candidate backed by Donald Trump, is advocating for a significant reform of Social Security before his term ends. The proposal, detailed in an interview with CNBC, involves establishing a new investment fund separate from Social Security's existing trust funds. Cassidy plans to invest $1.5 trillion into this fund over five years, with the expectation that it will grow over 65 to 70 years to cover 60 to 65 percent of the program's unfunded accrued liability. He emphasized that all investment risk would be borne by this new fund, ensuring beneficiaries receive their promised benefits.
This initiative comes as the Social Security's Old-Age and Survivors Insurance (OASI) Trust Fund faces a projected shortfall. The latest report from the board of trustees indicated that the fund can pay 100 percent of scheduled benefits until the fourth quarter of 2032, a slight earlier projection than the previous year. After that point, the fund is expected to cover only 78 percent of its obligations.
Following the trustees' report, Speaker Mike Johnson (R-La.) urged Republicans to act on Social Security reform if they maintain control of Congress. However, some Senate Republicans, like Sen. Josh Hawley (R-Mo.), expressed caution, viewing reform discussions as potential precursors to benefit cuts. Cassidy, alongside Senators Thom Tillis (R-N.C.), Dick Durbin (D-Ill.), and Tim Kaine (D-Va.), has called for bipartisan legislative action on the issue. Cassidy noted that his proposal is modeled after the National Railroad Retirement Investment Fund and expressed intent to find colleagues who would champion the idea in the next congressional session.