Sen. Bill Cassidy on Social Security: Proposing changes to Social Security trust fund

Proposed Social Security Solution - Senators propose diversifying trust fund investments to maintain benefits [1] - A separate fund from the Social Security trust fund would be created with $1.5 trillion over 10 years, invested in the US economy [3] - The return on investment would offset any unfunded liability in the Social Security trust fund [3] Funding Mechanism - The US would borrow $300 billion per year for 5 years to fund the separate trust fund [4] - Borrowing is offset by the escrow account, not contributing to national debt [4] Risk Mitigation & Safeguards - The fund would be held in escrow for 65 to 75 years [3] - Even during a 10-year secular bear market, the plan is projected to work due to the long investment horizon [6] - The plan has been modeled through the great financial crisis [6] - An independent board, patterned after the thrift savings plan, would manage investments with strict guard rails [8] - Congress would be mandated to raise taxes if any action decreases the return on investment [10] Current Social Security Status - The Social Security trust fund is projected to become insolvent in 8 years, potentially leading to a 25% benefit cut [5] - Current trust fund investments are in treasuries, some bearing 1-4% [2]