ICYMI: Social Security is in Worse Shape Than It Looks

WASHINGTON - U.S. Senator Bill Cassidy, M.D. (R-LA) penned an op-ed in The Washington Examiner sounding the alarm on a new report warning that Social Security is more financially strained than previously thought. A new update from the Social Security Trustees found that it would cost approximately $615 trillion to pay benefits and interest on the debt over time if we allow Social Security to go insolvent.

"[B]uried in the data was the alarming statistic that the total cost of Social Security insolvency has ballooned to $615 trillion in nominal dollars - yes, trillion. That's a nearly $100 trillion increase in debt from three years ago," wrote Dr. Cassidy. "We cannot afford to wait and see how much higher that number will go."

"Fixing Social Security is a math problem that will take political will to tackle. We know the longer we wait, the less favorable the math becomes and the more painful it will be to fix," concluded Dr. Cassidy.

Read the full op-ed here or below.

Social Security is in Worse Shape Than It Looks

The rot runs deeper than we thought.

In May, the public received another update from the Social Security trustees confirming that the Social Security Trust Fund will be insolvent in nine years. But buried in the data was the alarming statistic that the total cost of Social Security insolvency has ballooned to $615 trillion in nominal dollars - yes, trillion. That's a nearly $100 trillion increase in debt from three years ago. We cannot afford to wait and see how much higher that number will go.

That $615 trillion accounts for the cost of paying benefits and interest on the debt the United States would accrue if we allow Social Security to go insolvent and deficit-spend to keep it afloat over the next 75 years. This underscores both the severity of the problem and the need to stop burying our heads in the sand.

When the Social Security Trust Fund is depleted in nine years, current law dictates an automatic 21% benefit cut for all current and future retirees. Congress can avoid this cut by deficit spending, but it should pursue a strategy to make the program sustainable and fairer. We need a comprehensive plan that avoids massive benefit cuts or tax hikes and avoids putting us on the road toward $615 trillion in additional debt.

A Senate working group I'm leading has a proposal that accomplishes both. Our "Big Idea" creates a new fund separate and independent of the Social Security Trust Fund. This new fund would invest $1.5 trillion in financial markets, just like a normal pension fund, and hold it and all dividends in escrow for nearly 75 years.

Assuming historically average market return, our "Big Idea" covers about two-thirds of Social Security's shortfall, including the borrowing costs. The remainder can be addressed without raising taxes on seniors or decreasing their benefits.

In addition to this, our proposal would repeal the Windfall Elimination Provision and Government Pension Offset, create work incentives, and even evergreen the Social Security Trust Fund.

Fixing Social Security is a math problem that will take political will to tackle. We know the longer we wait, the less favorable the math becomes and the more painful it will be to fix. This isn't hyperbole -we're seeing the effect in real time. Investing now may save our country, and taxpayers, $615 trillion in debt down the line. That seems like a worthwhile investment for almost any reasonable American.

Background

Cassidy led a bipartisan working group to preserve and protect Social Security. Last spring, he released the inaugural Bill on the Hill video where he asked Capitol Hill visitors from across the country their thoughts on the looming benefit cuts to Social Security and presented his "Big Idea" to save, strengthen, and secure America's retirement system.

In March, Cassidy grilled U.S. Treasury Secretary Janet Yellen on President Biden's plan to address Social Security, to which Secretary Yellen admitted "the president doesn't have a plan," to save Social Security.

Cassidy has discussed the "Big Idea" at a public forum with AARP on the future of Social Security, outlined his Social Security plan in a fireside chat with the Bipartisan Policy Committee, and authored op-eds in the National Review, Washington Examiner, Wall Street Journal, State Affairs, and Washington Post.

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