Louisiana Sen. Bill Cassidy discusses his proposed $1.5 trillion investment fund to address Social Security deficits, while AARP’s Bill Sweeney reacts to the 2027 cost-of-living adjustment.
Sen. Bill Cassidy, R-La., warns that “time is running out” for Social Security because higher cost-of-living adjustments (COLAs) could accelerate the depletion of the program’s trust fund, adding urgency to an already looming funding gap.
FOX Business’ Darren Botelho has joined “Varney & Co.” to reflect the senator’s concerns about Social Security’s finances and the impact of rising prices on retirees.
Sen. Bill Cassidy warns that time is running out for Congress to address Social Security’s looming funding gap as rising costs put pressure on retirees. (Kevin Dietsch/Getty Images)
The warning comes as beneficiaries prepare for a 3.6% cost-of-living adjustment in 2027, which Botelho said would be about $75 more per beneficiary per month. The increase is intended to help recipients manage higher daily expenses, but larger benefits also put pressure on a system facing a long-term funding gap.
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Cassidy argued that the latest adjustment makes Congressional action more urgent, warning of dire consequences if lawmakers fail to close the deficit.
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“The fact that the COLA is much higher obviously reflects recent inflation, but I think it’s going to drain the trust fund much faster,” Cassidy said. “So if we have about five and a half years before the trust fund empties, in which case, by law, benefits will be cut by 28.5 percent or if Congress ignores the law and starts borrowing money like crazy to pay benefits, time is running out.”
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Cassidy proposed placing $1.5 trillion in a separate investment account to help close the projected funding gap. Botelho said Cassidy wants Congress to act before the situation gets worse.
Meanwhile, advocates for older Americans say annual benefit increases don’t necessarily keep pace with the costs retirees face. AARP Senior Vice President Bill Sweeney highlighted the concerns of seniors who rely on monthly payments.
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“76% of seniors tell us that it’s not enough, that the COLA doesn’t keep up with inflation… These are people who really rely on Social Security and especially the COLA to make sure they can continue to pay their bills,” Sweeney said.
These competing pressures present lawmakers with a difficult question: How to protect retirees’ purchasing power while also addressing Social Security’s long-term finances.
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