Senators' $1.5 Trillion Plan Promises To Save Social Security Without Cutting A Single Benefit — But Will It Really Work?

As concerns about the future of Social Security grow, a new bipartisan proposal aims to secure the program's finances without reducing a single benefit. But while the plan from Sens. Bill Cassidy (R-LA) and Tim Kaine (D-VA) promises a bold solution, some experts aren't convinced it will be fast — or risk-free — enough to solve the looming shortfall.

What's the Plan?

Cassidy and Kaine outlined their proposal last week in a Washington Post op-ed, describing a new $1.5 trillion investment fund separate from the current Social Security Trust Fund. The new fund would be structured as a sovereign wealth fund, similar to those used by other countries or the U.S. government's own Thrift Savings Plan.

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Instead of relying only on payroll taxes and low-return government bonds, this fund would be invested in a mix of stocks, bonds, and other assets. 

The goal? Generate higher long-term returns to help close the projected funding gap without cutting benefits.

According to the senators, the fund would be given 75 years to grow. During that time, the U.S. Treasury would continue to pay Social Security benefits and would later be repaid by the fund once it matures.

Why the Urgency?

Social Security's trust funds are expected to run out of money by 2033 or 2034, according to recent government reports. Once that happens, the program will only be able to pay about 77% of promised benefits, unless Congress acts.

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The core issue is that the system is paying out more than it's taking in — largely due to an aging population and slower growth in the workforce. Currently, all Social Security funds are invested in special U.S. Treasury bonds, which are stable but have relatively low returns.

The senators argue their proposal could delay or even prevent a crisis, while maintaining current benefits for retirees and future beneficiaries alike. "Waiting until the Social Security Trust Fund is on the eve of crisis would have difficult and preventable consequences," Cassidy and Kaine wrote.

Skepticism from Experts

While the plan is ambitious and avoids the politically unpopular idea of cutting benefits, not everyone is convinced it's practical.

"This kind of plan might have made more sense decades ago," Teresa Ghilarducci, labor economist and professor of economics and policy analysis at the New School for Social Research, told Investopedia. She pointed out that similar strategies by pension systems have failed in the past when market conditions changed.

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Others raised concerns about borrowing the initial $1.5 trillion investment. "Borrowing funds in the way the proposal suggests would likely raise interest rates and slow growth," Brookings Retirement Security Project Director Gopi Shah Goda told Investopedia. 

Goda argued that the plan avoids harder conversations about modernizing the program.

Will It Move Forward?

The bipartisan nature of the plan gives it a potential advantage. "Kaine has a solid reputation as a bipartisan negotiator," Mary Beth Franklin, a certified financial planner, said to Investopedia. "Cassidy has an in-depth knowledge of Social Security program details." 

Still, reaching a final agreement in Congress is no easy task. While there's broad agreement that Social Security needs reform, there's little consensus on how to do it.

"I think both sides understand that it’s in their best interest to find the pathway forward," said Stony Brook University economics and public policy professor Stephanie Kelton. "There is no financial reason there should ever be cuts to Social Security."

For now, Cassidy and Kaine's plan is one of the few bipartisan efforts on the table. Whether it gains traction — or runs out of time — remains to be seen.

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