Senator Cassidy's Plan to Rescue Social Security

The Social Security Solvency Crisis

• ⚠️ The Social Security Trust Fund is projected to become insolvent in approximately eight years, by 2033.
• 📌 If no action is taken, benefits will be cut by 21% to 25% to match incoming funds with outgoing payments.
• 🎯 Currently, there is no bipartisan plan in place to address this impending shortfall.

A Proposed Rescue Plan

• 💡 Senator Bill Cassidy, along with Senator Tim Kaine, has proposed a plan to create a separate investment fund for Social Security.
• 💰 This fund would be seeded with $1.5 trillion over five years, borrowed by the federal government but held in escrow, thus not adding to the national debt.
• 📈 The investment fund would be managed by a board of trustees, similar to the federal employees' retirement system, and would invest in a diversified portfolio, potentially including equities and other assets, to achieve higher returns than current Treasury investments.

How the Plan Works

• 🎯 The goal is to use the returns from this investment fund to offset the borrowing required to pay scheduled Social Security benefits.
• 🛡️ A key feature is that the beneficiary is insulated from market fluctuations; all investment risk is borne by the fund itself.
• 🚀 Over the long term, this plan aims to not only bail out Social Security but also potentially reduce the nation's indebtedness by 20% and evergreen the trust fund indefinitely.

Investment Strategy and Oversight

• 🏦 The current Social Security Trust Fund invests solely in Treasuries, some with yields below inflation.
• 🤝 The proposed investment fund would operate at an arm's length from Congress and the executive branch, with fiduciaries making investment decisions.
• 📊 While the initial borrowing is for five years, the investment strategy is designed for long-term growth, leveraging the rule of 72 to project significant gains over decades.