Center for Retirement Research Says $26.6 Trillion Cassidy-Kaine Social Security Plan Would Likely Fail
Updated
Updated · Center for Retirement Research · May 19
Center for Retirement Research Says $26.6 Trillion Cassidy-Kaine Social Security Plan Would Likely Fail
2 articles · Updated · Center for Retirement Research · May 19
A new Center for Retirement Research analysis found the Cassidy-Kaine proposal would most likely leave taxpayers with heavy debt after 75 years rather than shore up Social Security.
The plan would borrow $1.5 trillion for an investment fund and another $25.1 trillion to cover benefit gaps, but Monte Carlo simulations showed the fund usually would not offset the full $26.6 trillion.
At a 6.5% real equity return, the median outcome covered only 57% of borrowing; at 4.0%, it covered 19%, and with debt effects included even the 95th percentile offset just 21%.
The report said equities could still help if Congress first restores solvency through a 3.82% payroll-tax increase or equivalent benefit cuts and then invests up to 40% of trust fund assets in stocks.
That option loses force if lawmakers wait until 2034, when the trust fund is projected to near exhaustion and incoming revenue would cover only about 80% of scheduled benefits.
Could a Canadian-style investment model save Social Security without the massive debt of the Cassidy-Kaine plan?
How could capping benefits for the rich actually boost payments for millions of other Social Security recipients?
The Cassidy-Kaine Proposal and Social Security’s 2033 Shortfall: Promise, Peril, and Political Realities
Overview
Social Security faces a looming financial shortfall, as shown by regular assessments from the Social Security Administration that compare future benefit costs to payroll tax contributions. To address this, Senators Cassidy and Kaine have proposed a bipartisan plan that introduces an investment fund aimed at strengthening Social Security’s finances. Their proposal responds to the urgent need for comprehensive solutions to ensure the program can continue supporting older Americans for decades. The plan’s innovative approach highlights the importance of finding new ways to secure Social Security’s future while acknowledging the challenges identified in official reports.