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Sen. Bill Cassidy, R-La., is warning that the “clock is ticking” for Social Security as higher cost-of-living adjustments (COLA) could accelerate the depletion of the program’s trust fund, adding urgency to an already looming funding shortfall.
FOX Business’ Darren Botelho joined “Varney & Co.” to report on the senator’s concerns about Social Security’s finances and the impact of rising prices on retirees.
The warning comes as beneficiaries prepare for a 3.6% cost-of-living adjustment in 2027, which Botelho reported would amount to roughly $75 more per beneficiary per month. The increase is intended to help recipients manage higher everyday expenses, but larger benefit payments also put pressure on a system facing a long-term financing gap.
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Cassidy argued that the latest adjustment makes congressional action more urgent, warning of steep consequences if lawmakers fail to address the shortfall.
“The fact that the COLA is that much higher, obviously reflects recent inflation, but I think it’s going to drain the trust fund that much faster,” Cassidy said. “So if we now have like five and a half years until the trust fund goes empty, at which point by law, there’ll be a 28.5% benefit cut or Congress ignores the law and just starts to borrow money like crazy to pay benefits, the clock is ticking.”
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Cassidy has proposed placing $1.5 trillion into a separate investment account to help narrow the projected funding gap. Botelho reported that Cassidy wants Congress to act before the situation worsens.
Meanwhile, advocates for older Americans say annual benefit increases are not necessarily keeping pace with the costs retirees face. AARP Senior Vice President Bill Sweeney pointed to concerns among older adults who depend on monthly payments.
“76% of older adults tell us that it isn’t enough, that the COLA isn’t keeping up with inflation… These are people who really rely on Social Security and especially the COLA to make sure that they can continue to pay their bills. ” Sweeney said.
The competing pressures leave lawmakers facing a difficult question, how to protect retirees’ purchasing power while addressing Social Security’s long-term finances.
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