A projected funding gap could trigger an automatic 22% reduction in Social Security benefits by 2032 unless policymakers intervene.
The latest annual trustees report, released earlier this month, projects that the Old-Age and Survivors Insurance trust fund will run out by late 2032.
Sen. Bill Cassidy (R-La.) believes he has found a way to sidestep the traditional debate over raising taxes or cutting retirement benefits.
The outgoing lawmaker, who lost his Republican primary in May to a Trump-backed challenger, is using his final months to push an unconventional plan.
The proposal would have the federal government borrow $1.5 trillion over five years and invest the money in stocks through a separate fund.
Independent researchers at Boston College, however, say the math behind the proposal does not work under realistic assumptions about market returns.
How Cassidy’s $1.5 trillion Social Security investment fund would work
That $1.5 trillion would be placed in equities and other market assets, separate from Social Security’s existing trust funds, Cassidy told CNBC in a June 10 interview published on June 23.
Over 65 to 70 years, Cassidy estimates the fund would grow large enough to cover 60% to 65% of Social Security’s unfunded accrued liability.
He has compared the approach to the National Railroad Retirement Investment Trust, which Congress created in 2001 to invest railroad workers’ pension assets in private securities.
Cassidy argues the borrowing would not increase the national debt because the $1.5 trillion would remain in a government-held escrow account for the entire period.
What researchers say about the plan’s chances of working
Not all experts share Cassidy’s confidence. A May analysis by the Center for Retirement Research at Boston College found the proposal unlikely to close Social Security’s funding gap on its own.
Researchers ran 10,000 simulations and found the fund would fail to repay its borrowing 64 out of 100 times under optimistic return assumptions.
Under more realistic projections of market performance, the failure rate climbed to 83 out of 100 simulations, the Boston College researchers found.
Alicia Munnell, senior advisor at the Center for Retirement Research, called the plan a “flight of fancy” in an April 9 commentary published by the center.
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Munnell noted that comparable models the proposal cites, including the Railroad Retirement Trust and Canada’s Pension Plan, fund their portfolios with tax revenues and employee contributions, not borrowed money.
The Committee for a Responsible Federal Budget reached a similar conclusion in a March analysis, warning that massive new borrowing could further strain already-pressured bond markets.
Cassidy pushed back on the independent analyses in a statement to The Center Square, noting the proposal has been shown to cover the majority of Social Security’s shortfall.Â
“Social Security is running out of money, and the longer we do nothing, the worse the outcome is for workers, retirees, and taxpayers,” Cassidy said.
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Cassidy is racing the clock on Social Security
Cassidy’s push carries an unusual personal urgency that goes beyond the policy stakes of a funding crisis affecting more than 71 million Social Security beneficiariesÂ
He finished third in Louisiana’s Republican primary in May with 24.8% of the vote, behind Rep. Julia Letlow and state Treasurer John Fleming.
Cassidy’s Senate term expires in January 2027, and no formal legislation text has been introduced for the plan, which remains a policy outline.
Margaret Spellings, president and CEO of the Bipartisan Policy Center, said in a statement following the release of the June 2026 Social Security trustees report, warning that the cost of congressional inaction grows with every year lawmakers fail to move.Â
These insolvency dates may feel abstract and far away, but the reality is that the senators elected in 2026 will be in office when Social Security reaches insolvency. The question is no longer whether these challenges demand attention. It is whether Washington will find the will to act
Despite the short timeline, Cassidy has assembled bipartisan support, joining Sens. Tim Kaine (D-Va.), Dick Durbin (D-Ill.) and Thom Tillis (R-N.C.) in urging action.
“It’s clear now that Congress shouldn’t delay any longer,” the four senators wrote in a joint statement released on June 10, the day after the trustees’ report.Â
Three of those four senators, Cassidy, Tillis, and Durbin, are leaving the chamber when their current terms end in January 2027.
The monthly cost of a 22% Social Security benefit cut
For a retiree receiving the current average monthly benefit of around $2,071, a 22% reduction would translate to roughly $455 less per month, according to figures cited by Sen. Dick Durbin on the Senate floor.Â
By 2032, when benefits will have grown with annual cost-of-living adjustments, the average monthly cut could reach $500, according to the Committee for a Responsible Federal Budget.
A cut of that size would be especially painful for the 43% of retirees who rely on Social Security for the majority of their income, AARP has reported.
What comes next as Congress faces the 2032 deadline
House Speaker Mike Johnson (R-La.) has called for reform but indicated he does not plan to tackle Social Security until a new Congress convenes in 2027, The Hill reported.
Some Senate Republicans remain uneasy with the reform conversation itself, with Sen. Josh Hawley (R-Mo.) warning that talk of reform often serves as cover for benefit cuts.
Cassidy has said he will continue pushing through hearings and public advocacy until he leaves office, and is already talking with future colleagues about the effort.
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