WASHINGTON – U.S. Senator Bill Cassidy, M.D. (R-LA) wrote a Letter to the Editor in the Wall Street Journal highlighting his “Big Idea” to save Social Security. America needs a bipartisan solution to save all Americans from a 23% cut in Social Security benefits in eight years. The “Big Idea” from his Senate Social Security working group will build a bridge to solvency and secure it for decades to come.
“The Big Idea avoids this automatic 23% benefit cut and responsibly solves the inevitable fiscal cliff. The proposal creates an investment fund, separate from the Social Security Trust Fund, that doesn’t use any Social Security funds. This separate fund, accruing returns over 70 years with a diversified investment portfolio and strong guardrails, addresses the majority of the Social Security shortfall,” wrote Dr. Cassidy. “This isn’t a radical idea. It’s already used by the federal government in the Thrift Savings Plan, as Messrs. Keeley and Puzder point out, and elsewhere, including the Wisconsin Retirement System, the U.S. National Railroad Retirement Trust and Canada Pension Plan. Other countries use the U.S. stock market for their retirement and sovereign wealth funds, but the U.S. doesn’t.”
“With increased returns, we can provide a steady funding stream to patch the Social Security Trust Fund while making the program stronger and fairer. We can repeal the windfall-elimination provision, government pension offset, and retirement-earnings test… We could also add additional benefits to support workers and alleviate elderly poverty,” continued Dr. Cassidy. “The longer we delay addressing insolvency, the more difficult it becomes. If the Big Idea was enacted last year and vested the investment fund in the S&P 500, there would have been a 24% return.”
This letter comes on the heels of President Biden’s third State of the Union where he once again chose to use Social Security as a campaign issue and lied to the American people about the program.
Last month, Cassidy also delivered the keynote speech at the National Institute on Retirement Security’s 15th Annual Retirement Policy Conference. Read the full letter here or below:
We Can Fix Social Security Before It Reaches the Fiscal Cliff
Other countries use the U.S. stock market for their retirement and sovereign wealth funds, but the U.S. doesn’t.
Senator Bill Cassidy, M.D. (R-LA)
March 6, 2024
Terrence Keeley and Andy Puzder hit the nail on the head in “How to Save Social Security Without Privatizing or Cutting Benefits” (op-ed, Feb. 29). The first half of their op-ed sounds a lot like the bipartisan Senate “Big Idea” to save, strengthen and secure Social Security that I have pushed.
In eight years, there will be an automatic 23% cut affecting all current and future beneficiaries. The Committee for a Responsible Federal Budget estimates this would be an annual loss of $17,400 for retired couples and $13,100 for individuals. This cut would also double elderly poverty.
The Big Idea avoids this automatic 23% benefit cut and responsibly solves the inevitable fiscal cliff. The proposal creates an investment fund, separate from the Social Security Trust Fund, that doesn’t use any Social Security funds. This separate fund, accruing returns over 70 years with a diversified investment portfolio and strong guardrails, addresses the majority of the Social Security shortfall.
This isn’t a radical idea. It’s already used by the federal government in the Thrift Savings Plan, as Messrs. Keeley and Puzder point out, and elsewhere, including the Wisconsin Retirement System, the U.S. National Railroad Retirement Trust and Canada Pension Plan. Other countries use the U.S. stock market for their retirement and sovereign wealth funds, but the U.S. doesn’t.
With increased returns, we can provide a steady funding stream to patch the Social Security Trust Fund while making the program stronger and fairer. We can repeal the windfall-elimination provision, government pension offset, and retirement-earnings test. The first two over-penalize firefighters, policemen and widows, and the latter is a work disincentive. We could also add additional benefits to support workers and alleviate elderly poverty.
The longer we delay addressing insolvency, the more difficult it becomes. If the Big Idea was enacted last year and vested the investment fund in the S&P 500, there would have been a 24% return. By comparison, the Social Security Trust Fund invests only in bonds and treasuries with average returns often between 1% and 4%.
Background
Cassidy led a bipartisan working group with U.S. Senator Angus King (I-ME) 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 23% benefit cut to Social Security and presented his “Big Idea” to save, strengthen, and secure America’s retirement system.
At a Senate Finance Hearing last year, he questioned U.S. Treasury Secretary Janet Yellen on the Biden administration’s lack of a plan to address Social Security at a Senate Finance hearing. He also delivered a speech on the Senate floor calling on President Biden to honor his pledge to protect Social Security and meet with a bipartisan group of senators discussing options to save the program.
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 an op-ed in the National Review and Washington Examiner.
In March 2023, the Trustees of the Social Security and Medicare trust funds moved up the Social Security insolvency deadline a full year. One month prior, the Congressional Budget Office updated its estimates saying Social Security is heading toward a financial cliff in 2032. They found Medicare and Social Security spending rapidly outpacing federal tax revenues further hastening the insolvency deadlines.
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