Senator Cassidy Sounds Alarm on Social Security Funding as 2027 COLA Accelerates Trust Fund Depletion

Louisiana Senator Bill Cassidy is calling for immediate legislative action to address the mounting funding shortfalls in Social Security, proposing a bold $1.5 trillion investment fund to stabilize the program. Meanwhile, advocates, including representatives from AARP, are raising concerns over whether upcoming cost-of-living adjustments will adequately support retirees facing rising costs.

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 critical urgency to an already looming funding shortfall. FOX Business’ Darren Botelho joined “Varney & Co.” to report on these pressing financial concerns and the impact of inflation on retirees.

Sen. Bill Cassidy warns that time is running out for Congress to address Social Security’s looming funding shortfall 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 is expected to amount to roughly $75 more per beneficiary per month. While the increase is designed to help recipients manage higher everyday expenses, larger benefit payments also intensify the pressure on a system facing a long-term financing gap.

Cassidy argued that the latest adjustment makes congressional action even more urgent, warning of steep consequences if lawmakers fail to address the shortfall in a timely manner.

“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.”

Cassidy has proposed placing $1.5 trillion into a separate investment account to help narrow the projected funding gap, urging Congress to act before the situation worsens.

Meanwhile, advocates for older Americans argue that annual benefit increases are not necessarily keeping pace with the real costs retirees face. Bill Sweeney, Senior Vice President of AARP, pointed to significant concerns among older adults who depend heavily on monthly payments to cover basic living expenses.

“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 balancing act: how to protect retirees’ purchasing power while addressing the long-term financial viability of Social Security.

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