Republican Sen. Bill Cassidy of Louisiana speaks to the press on Capitol Hill on Feb. 10, 2021.
Nicholas Kamm | AFP | Getty Images
Social Security’s trust funds have a new projected depletion date that is about a decade away.
Sen. Bill Cassidy, R-La., revealed during a Tuesday webcast hosted by the Bipartisan Policy Center that he is working on a bipartisan “big idea” to address the program’s 75-year shortfall.
The idea calls for creating an investment fund separate from Social Security and allowing the investment to earn returns over a period of 70 years, Cassidy said.
The proposal would repair a key failing of Social Security’s current strategy, which keeps all of the trust funds in either Treasurys or cash, Cassidy said. Treasurys yield anywhere from 1% to 3% at a time when inflation has been up to 7%, he noted.
By allowing the program to invest its funds in the market, which historically has provided more than 8% returns, that could address 75% of the 75-year shortfall, Cassidy said.
“It gets us substantially there,” Cassidy said.
It would target the Social Security trust funds’ biggest weakness, which is that it has “the absolute worst investment strategy you could have right now,” Cassidy said.
“It is the Silicon Valley Bank of pension funds, with an investment strategy inadequate for a high inflation environment,” he said.
We think it’s a really good start on a solution.
Sen. Bill Cassidy
Republican of Louisiana
Cassidy is working with Sen. Angus King, I-Maine, who caucuses with Democrats, to craft a bipartisan solution to fix the program. While the lawmakers have identified the creation of a fund as a key way to address the program’s solvency, the plan is still a work in progress, Cassidy said, with room for participation from other leaders on both sides of the aisle.
“We think it’s a really good start on a solution,” Cassidy said. “Now we need leading presidential candidates to step to the plate, be honest with the American people and help us find the additional…
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