Sen. Bill Cassidy, R-La., speaks to reporters following the weekly Republican Senate policy luncheon at the U.S. Capitol on March 11, 2025 in Washington, D.C.
Kayla Bartkowski | Getty Images News | Getty Images
Republican Sen. Bill Cassidy of Louisiana has one big task he would like to check off his to-do list before his last day in office — Social Security reform.
Cassidy, a two-term senator, failed in May to win his primary reelection bid against Rep. Julia Letlow and state Treasurer John Fleming. President Donald Trump endorsed Letlow over Cassidy, who was one of seven Republican senators who voted to convict the president during his impeachment trial for allegedly inciting insurrection at the U.S. Capitol on Jan. 6, 2021.
Now Cassidy, whose term officially ends on Jan. 3, 2027, has vowed to get as much done as he can in his final days in office — including addressing Social Security, sometimes called the third rail of politics because of the potential consequences for leaders in office who enact changes to the program that more than 71 million Americans rely on for monthly Social Security retirement and disability benefits.
“The longer you wait, the harder it is to fix, the more painful to fix,” Cassidy told CNBC.com on June 10 in an interview outside the Capitol building. “We need to do something now.”
Social Security faces an imminent funding shortfall, according to the latest annual report from the program’s trustees, released on June 9. Absent action from Congress, the trust fund used to pay benefits to retired workers, their spouses, children and survivors of deceased workers — known as Old-Age and Survivors Insurance, or OASI — may run out in the fourth quarter of 2032, according to the report, several months earlier than had been projected the year before.
If no changes are enacted by that time, the OASI trust fund depletion may trigger across-the-board benefit cuts. Just 78% of scheduled benefits for that fund would be payable at that time, according to the trustees’ latest projections.
Lawmakers may opt to extend the program’s funding slightly by combining the retirement and disability trust funds. Social Security’s trustees estimate that this would bring the depletion date to the third quarter of 2034, when 83% of scheduled benefits would be payable.
The new Social Security trustees report has prompted acknowledgment from House and Senate leaders on both sides of the aisle that something needs to be done.
“It’s clear now that Congress shouldn’t delay any longer,” four senators — Cassidy; Dick Durbin, D-Ill.; Tim Kaine, D-Va.; and Thom Tillis, R-N.C. — said in a joint statement released on June 10.
“Several of us have been coming together to talk about how we can strengthen Social Security for current and future generations of retirees,” the four senators wrote. “We say to our colleagues: join us in doing what we were elected to do—legislate on hard issues and protect this lifeline program for our kids and grandkids.”
While time is of the essence for Social Security, it is also a factor for both Durbin and Cassidy.
Durbin, who is currently Senate minority whip, is retiring at the end of his current term.
“I’m a retiring, so to speak, senator,” Cassidy said. “I want to get it done before we leave, so there is impetus to get it done.”
What’s in Cassidy’s ‘big idea’ fix
Social Security reform will have to be bipartisan, since legislation on the program requires 60 votes in the Senate.
Some Democrats have proposed raising taxes on the wealthy to help shore up Social Security’s finances while also increasing benefits. Meanwhile, Republicans largely oppose tax hikes, which leaves benefit cuts such as raising the retirement age as potential options.
Cassidy has come up with what he calls a “big idea” plan that mostly sidesteps the dilemma of raising taxes or cutting benefits. Instead, the proposal calls for investing $1.5 trillion in an investment fund separate from Social Security’s trust funds over five years. Over 65 to 70 years, that money that would be invested in the stock market would grow to 60% to 65% of Social Security’s unfunded accrued liability, Cassidy said.
While the $1.5 trillion would be borrowed, it wouldn’t increase the nation’s debt, since it would be held in an escrow account and would therefore stay in the government’s possession, according to Cassidy.
The plan is modeled after changes enacted to the federal Railroad Retirement system under President George W. Bush that allowed the pension funds to be invested in private securities.
Investing on behalf of that program improved its solvency, Cassidy said, and could be a model for Social Security. Notably, the change was enacted on a bipartisan basis, Cassidy said.
It remains to be seen whether the proposal will win broader political support on Capitol Hill or from the White House. “President Trump and I are not BFFs,” Cassidy said of the president, who last month called the senator a “disloyal disaster” on social media. The White House did not respond to a request for comment.
To be sure, the idea may also be a tough sell with some Democrats, who have proposals in both the House and Senate to extend the program’s solvency through a combination of raising taxes and increasing benefits.
A recent analysis of Cassidy’s bipartisan proposal with Sen. Tim Kaine, D-Va., by the Center for Retirement Research at Boston College said it is “unlikely to work,” since it would leave the government indebted in the 75th year, requiring large interest payments. However, investing in equities on behalf of the program could work if paired with immediate reforms that either raise taxes or cut benefits, the researchers said.
The Bipartisan Policy Center, a Washington, D.C., think tank that promotes bipartisanship, has pointed to concerns about how the bond market would react to a “significant increase in borrowing” when the national debt is on an “unsustainable trajectory.”
Moreover, future stock market returns are unpredictable, and leveraged investment strategies involve “significant risk,” according to the Bipartisan Policy Center.
Cassidy said crafting the proposal has included an analysis of what would have happened during past market blips and found there would be an investment premium representing a higher return than the cost of borrowing.
“All risk is borne by the fund; people would get their promised benefits,” Cassidy said.
Senators who have been working on Social Security proposals for a long time should have the opportunity to present them, Durbin said during a June 10 Senate floor speech.
“But to do that, we have to do something we haven’t done in a long time,” Durbin said. “Get ready. Buckle your seatbelts. I’m talking about legislating, actually bringing a measure to the floor and opening it to amendment.”
‘Seeing who’s interested in … carrying the torch’
Cassidy said the next steps in his plan are to hold more hearings on the proposal and to have it drafted as legislative text.
One question that will need to be answered is how to fill the remaining 35% hole in Social Security’s financing not currently covered by the investment fund, Cassidy said.
“If it doesn’t pass this Congress, I am speaking to colleagues who will be here next Congress and seeing who’s interested in kind of carrying the torch,” Cassidy said.
Leaders elected to the Senate this fall will be in office in late 2032, when the Social Security retirement trust fund is now projected to run out.
However, if policymakers wait to act, the cost of any potential fixes gets more expensive, experts say.
“We need to put the politics aside for the good of the country, for at least a little bit,” Cassidy said. “That’s a challenge before members of Congress right now.”
