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Senators Move Forward with Plan to Invest $1.5T in Social Security

Senators Bill Cassidy (R-La.) and Tim Kaine (D-Va.) are pushing for a plan to help Social Security in the long run. This bi-partisan effort looks to stabilize the future of Social Security by creating a secure trust which will grow over a 70-year period of time.

The early stages of this plan see the government adding $1.5T over the course for 5 years into an investment fund. The fund would be untouchable by any government entity for a period of 70 years.

“It is something to save Social Security, and to save the benefits flowing to the people, frankly, will either already depend on them or will depend upon them going forward,” Cassidy told a media outlet last month.

Cassidy said that the fund would be totally separate from the Social Security system and untouchable for 70 years. The funding of the fund would require the federal government to add $300B per year over a five-year span. The money would then be invested in stocks, bonds, mutual funds and possibly even cryptocurrency.

“Any dividends being paid, for example, flow back into the investment fund. As that occurs, we also repeal the law requiring that benefits be cut to match income,” said Cassidy. “The reason is that if you have money in an escrow account, you could always just empty the escrow account and pay off the Treasuries required to do the initial funding,” he said. “And so, even though we’re borrowing that money, it does not increase our nation’s indebtedness, and the investment income will exceed the interest that accumulates on the money borrowed.”

Cassidy went on to say “In a previous Congress, we had seven Republicans and seven Democrats. We’re putting that coalition back together, they will openly support, or they look forward to supporting, but they just plan to learn a little bit more.”

Critics of the idea state that the plan does not improve the program’s finances because it “does not improve the program’s finances because it avoids imposing the tax increases or benefit reductions that are necessary to keep it solvent.”

Other critics say it “would likely raise interest rates and slow growth and avoids the difficult but important work of modernizing the program so that it can continue to provide important protection to seniors in a sustainable manner.”

Whatever happens to this movement the overall message is clear: something needs to be done to at the federal level to ensure Social Security is properly funded in perpetuity.