Tim Kaine and Bill Cassidy, a bipartisan senator, have proposed a plan to increase the solvency of Social Security. The plan involves investing $1.5 trillion over the next five years into an investment fund that will grow for 70 years. The Treasury Department will be responsible for making up the payments for those 75 years, and the fund will pay back the Treasury Department and use its remaining funds to supplement Social Security payments. Cassidy argued that the plan would not add to the national debt, which currently stands at over $30 trillion. The plan could generate at least 70% of the borrowing required to pay the benefits over the next seven decades. The senators are still collecting input on their plan, but the idea is similar to a previous effort led by Cassidy that involved a coalition of senators from both sides of the aisle. Kaine believes that the plan could be an important part of their solution, making the path towards solvency easier and potentially reducing Congress’s need to look to more painful options to extend the lifetime of the program.
Tim Kaine and Senator Bill Cassidy have proposed a bipartisan plan to address Social Security’s funding shortfall. However, experts have raised questions about the proposal, citing concerns about the program’s finances and the need for tax increases or benefit reductions. The American Enterprise Institute (AEI) and the Brookings Institution have criticized the plan, comparing it to a “pension obligation fund” in some states. The combined trust funds for Social Security are projected to run out in 2034, with the Old-Age and Survivors Insurance (OASI) fund covering 100% of total scheduled benefits until 2033 and the Disability Insurance (DI) trust fund covering 100% of total scheduled benefits through at least 2099. The Trump administration’s chief actuary has projected that the trust funds will begin to see lower levels of tax revenue of Social Security benefits starting this year. The chances of Social Security action in Congress are uncertain, with Cassidy speaking to the chairman about a potential hearing on the legislation.
