Boston College: Cassidy-Kaine Fund Unlikely to Fix Social Security

Researchers at the Center for Retirement Research at Boston College reviewed the Cassidy-Kaine proposal and concluded it would probably not restore Social Security’s long-term finances.

Senators Bill Cassidy and Tim Kaine unveiled the bipartisan plan in July 2025. The proposal calls for an initial $1.5 trillion infusion to seed a 75-year sovereign wealth fund that would invest in equities, bonds and other higher-return assets and operate under a fiduciary standard. The plan anticipates repaying the Treasury after 75 years and supplementing payroll tax revenues.

The Boston College team — Anqi Chen, Alicia H. Munnell and Jean-Pierre Aubry — wrote that the strategy is likely to leave the government with a large amount of debt in the 75th year, creating significant interest costs. Their analysis found that borrowing to invest would not be a standalone solution and that adding equities would only improve finances if combined with reforms that restore balance between revenues and benefits and rebuild reserves.

The researchers recommended that policymakers enact a tax increase or cut benefits now and then allocate about 40% of reserves to equities. They warned that if action waits until 2034, when the Social Security trust fund is projected to be exhausted, the plan would probably not produce a lasting fix.

Cassidy and Kaine estimated the upfront $1.5 trillion would seed the fund and argued long-run market gains and a fiduciary duty would increase returns. They compared the proposal to state and private pension funds and to the National Railroad Retirement Investment Trust as a model for a government-directed investment vehicle.

Critics questioned borrowing to invest for a program as large as Social Security. Charles ‘Chuck’ Failla, founder of Sovereign Financial Group, objected to taking on more public debt to fund benefits. He proposed alternative changes for younger workers, including removing the payroll tax cap, lowering the payroll tax rate and making benefits means-tested for wealthy households, while keeping current beneficiaries in the existing system.

Andrew G. Biggs of the American Enterprise Institute raised concerns about exposing Social Security to stock market volatility and about the government acquiring a larger stake in publicly traded companies if the fund moved substantial sums into equities.

The Boston College authors urged that any shift toward equity investments be implemented early and be part of a broader package that includes revenue increases or benefit reductions to restore solvency and rebuild reserves. They wrote that without those measures and prompt action, equity investments alone would not resolve the program’s projected shortfall.