The core of the senators’ proposal is a new investment fund designed to grow through long-term investments.
“Doing nothing is not an option. We are putting a real, workable plan on the table to fix this crisis now,” he said.
The senators’ proposal keeps the existing Social Security Trust Fund but acknowledges its limitations: it relies on payroll taxes that can no longer fully cover future benefits, and the fund is restricted to low-yield investments in U.S. government bonds.
While maintaining the existing Social Security Trust Fund, a new fund would be established alongside it, allowing it to invest in a broader, diversified portfolio, including stocks, bonds, and other higher-yield assets. According to the senator’s proposal, this is similar to how many public and private pension funds already operate.
To jumpstart the new fund, Cassidy and Kaine propose an initial $1.5 trillion investment with 75 years to grow. During that time, the Treasury would continue to pay benefits, but the fund would eventually reimburse the government and supplement projected gaps in payroll taxes.
The senators cite the success of the National Railroad Retirement Investment Trust, established by Congress in 2001, as proof that similar structures can be effective. That trust is also designed to supplement a government retirement program.
To protect the proposed fund from political misuse, Cassidy and Kaine recommend governance rules modeled after the Thrift Savings Plan, a government-run retirement savings program for federal employees and military personnel. This would include a fiduciary duty to maximize returns, annual public audits for transparency, and guardrails to prevent future Congresses from using the fund for unrelated purposes, according to their proposal.