Senators Bill Cassidy and Tim Kaine propose borrowing $1.5 trillion for an investment fund to address Social Security’s looming insolvency, betting that stock market gains over 75 years can repay the debt and cover the program’s shortfall—but stress tests show the plan fails in about 70 percent of scenarios, experts warn.
The proposal arrives as the Social Security trust fund faces its most urgent deadline yet. In June, trustees reported the Old-Age and Survivors Insurance Trust Fund will be depleted in late 2032, just six years away, forcing an automatic 22 percent cut to monthly benefits unless Congress acts. The accelerated timeline reflects a shrinking ratio of workers to retirees and insufficient payroll tax revenue to cover promised benefits.
Under the Cassidy-Kaine plan, the federal government would borrow $1.5 trillion upfront to seed a separate investment fund. That fund would be invested in equities and other higher-return assets for 75 years, with the theory that stock market gains would generate enough growth to repay the borrowed money and cover the roughly $25.1 trillion gap between projected revenues and scheduled benefits over that period.
“All risk is borne by the fund; people would get their promised benefits,” Cassidy told CNBC in June. The Louisiana Republican, who was defeated in a GOP primary earlier this year, is pushing the proposal before he leaves the Senate. He modeled the idea after the National Railroad Retirement Investment Fund, which Congress created in 2001 to allow railroad workers’ pensions to be invested in private securities.
But researchers who stress-tested the plan found serious flaws. Andrew G. Biggs at the American Enterprise Institute ran over 1,000 simulations and found the investment fund would fully repay the debt only 30 percent of the time. In 70 percent of simulated results, the fund’s ending balance wouldn’t be sufficient to pay off the associated debt. Most troubling, Biggs estimates a one-in-ten chance that the plan would finish 75 years owing over $129 trillion—debt that would require massive interest payments.
Researchers at the Center for Retirement Research at Boston College reached similar conclusions after running 10,000 simulations. Even using the plan’s own assumed real return of 6.5 percent annually, the investment fund would only fully repay the borrowing about 36 percent of the time. “After incorporating the volatility in equity returns, the results show that the gamble does not always pay off,” researchers Anqi Chen, Alicia Munnell, and Jean-Pierre Aubry wrote in their analysis.
The Cassidy-Kaine proposal assumes nominal stock returns of 8.9 percent annually, in line with historical performance. However, top Wall Street firms have projected future stock market gains will fall short of historical averages. Simulations applying a 4 percent yearly real return on stocks show the investment fund failing to pay off debt 83 percent of the time. The plan also doesn’t account for how loading up on that much debt would affect interest rates and the stock market itself—currently, total federal debt is $39 trillion, and publicly held debt is already 100 percent of GDP.
Despite the criticism, Cassidy and Kaine have framed their plan as a bipartisan solution that avoids the traditional trade-offs of Social Security reform: raising payroll taxes or cutting benefits. In a joint statement released in June alongside Senators Thom Tillis and Dick Durbin, the four lawmakers called on Congress to “join us in doing what we were elected to do—legislate on hard issues and protect this lifeline program for our kids and grandkids.”
The Center for Retirement Research suggests an alternative path: if Congress first restored the funds’ solvency through tax increases or benefit cuts, and then shifted a portion of the trust fund into equities, it could meaningfully reduce the need for further adjustments. Social Security has weathered solvency crises before. In 1983, when the program faced a similar funding emergency, Congress passed major reforms that kept it solvent for decades.
Sources
- The Hill — Cassidy’s proposal details, timeline, and statement from June 2026
- Fortune — Proposal mechanics, borrowing amounts, and Boston College stress-test findings
- Moneywise — Expert analysis from AEI and Center for Retirement Research, $129 trillion debt scenario
- Washington Post — 2032 trust fund depletion date and 22 percent benefit cut
- CBS News — Trust fund insolvency projection for 2032
