Andrew Biggs suggested in his recent opinion piece in National Review that it is possible to reform Social Security in a tidy manner. But the only way to protect Social Security beneficiaries from the 24 percent benefit cut prescribed under current law is to come up with a plan that can actually pass Congress.
That’s why we have a “Big Idea” to save all current and future retirees from that massive benefit cut. To clarify, our “Big Idea” creates an investment fund separate from the Social Security Trust Fund. It invests $1.5 trillion in the growth of the American economy and holds it in escrow for 70 years.
This initial seed money does not have to rely on borrowing. We have several options to raise the initial funding, including selling off government assets, like empty federal buildings. This is a political decision that needs to be made when a president comes to the table.
Biggs also suggested that our plan will be a drag on GDP, but when weighing the options, this is the only realistic plan that will not drastically affect long-term GDP growth. Raising the FICA tax on working Americans would be regressive, cutting benefits will likely increase elderly poverty, and unchecked borrowing would lead to fiscal ruin.
With nearly half of Baby Boomers saying they have no retirement savings apart from Social Security, we need to do something.
This conversation cannot move forward by only entertaining abstract ideas that have no chance of passing Congress. We have to look at the reality of what can be done, and abandon the attitude of, “Boy, wouldn’t this be nice.”
Bill Cassidy is the senior U.S. senator from Louisiana.