WASHINGTON, May 27, 2026, 12:03 EDT
- Boston College’s retirement research group said in a paper that using a debt-financed stock fund likely won’t fill Social Security’s shortfall.
- The finding comes as combined trust funds for the program are expected to dry up in 2034, leaving just 81% of scheduled benefits available at that point.
- The debate is important as lawmakers search for other options besides raising taxes, slowing benefit growth, or doing both.
Borrowing on a large scale to invest in stocks as a fix for Social Security would probably saddle taxpayers with more debt instead of saving the program, says a Boston College Center for Retirement Research study. The report, which got new mentions this week from Yahoo Finance, GuruFocus and policy analysts, found little support for the idea.
Social Security is back in the policy spotlight as its funding deadline nears. The latest trustees’ report projects the combined old-age, survivors and disability trust funds will run out in 2034. After that, the program could pay only 81% of benefits from revenue coming in.
Anqi Chen, Alicia H. Munnell and Jean-Pierre Aubry wrote a paper on a plan tied to Senators Bill Cassidy, a Republican from Louisiana, and Tim Kaine, a Democrat from Virginia. Their idea is to borrow $1.5 trillion, put it into a separate investment fund, and invest that money in stocks and other riskier assets for 75 years. Over that same period, the plan would also require another $25.1 trillion in borrowing to cover benefit shortfalls.
That’s the catch. Stocks can beat Treasurys over time, but those returns mean more risk. The Boston College analysis showed that with a 6.5% real return, the fund couldn’t pay back all its borrowing in 64 out of 100 cases. With a 4.0% real return, it only succeeded 17 times out of 100.
Douglas Holtz-Eakin, who runs the American Action Forum and used to lead the Congressional Budget Office, said Tuesday that the equity-borrowing strategy makes things worse at the start since the government needs to borrow first before it can invest. The issue, he wrote, is that the higher expected returns from stocks just pay investors for taking on more risk.
Cassidy and Kaine pitched the plan in a different way. In an op-ed from July 2025 that Cassidy’s office shared, the senators described a new investment fund that would operate in addition to the current trust fund rather than replace it. They said it would include rules like fiduciary duties and yearly audits. “Congress should seize the moment,” they wrote. U.S. Senator Bill Cassidy
The idea has been used in some public retirement systems, though not exactly the same way. A Boston College paper points to the Canada Pension Plan, National Railroad Retirement Investment Trust and the federal Thrift Savings Plan as examples where public or quasi-public funds have equity exposure. But the researchers also said these cases don’t solve Social Security’s main issue: its investable reserves are dropping toward zero.
The Bipartisan Policy Center said in December the Cassidy-Kaine fund stands apart from usual public pension funds, since it would draw on general revenues or borrowing instead of surplus program inflows. The center called the fund a creative move for reform, though it still sees the need for bigger tax and benefit changes.
The Committee for a Responsible Federal Budget used the term “Sovereign Debt Fund” to describe the idea. In a March analysis, the group said it could mean much higher federal borrowing over the next 75 years and would bring Social Security market risks bigger than those in current pension models. CRFB
The Boston College authors stopped short of saying all equity investing should be avoided. They said stocks could help, but only if Congress first made Social Security solvent through new taxes, benefit reductions, or a mix, and then put some rebuilt trust fund money into equities. Delaying action cuts the upside, they said. Waiting to act until 2034 would probably miss the window for a lasting fix.
Supporters face the chance that markets could outperform expectations, which would hand lawmakers an option other than raising taxes or cutting benefits. But the risk for others is more direct: if returns lag, the government remains on the hook for the shortfall, and retirees still see the fundamental gap between Social Security income and what’s been promised.
Right now, the arithmetic doesn’t change for Washington. Stocks might add a bit if lawmakers also go for a solvency plan, but that doesn’t solve the main problem. Lawmakers still have to figure out who pays extra, who gets cut, and when Congress will move.
