The Porter Proposal: Its Impact on Women's Social Security Benefits

Abstract

Social Security is one of the programs most accepted by the general public. Its purpose is to provide adequate and equitable benefits for the disabled and the retired. Once faced with bankruptcy, it now has a cash surplus estimated to reach twelve trillion dollars by 2030. The program, however, is not without critics. With its cash surplus being used to pay for current federal expenditures, it has been under increasing opposition. Representative John Porter, an advocate for change, has introduced a bill which would partially privatize the program. His intent is to eliminate the cash surplus by allowing workers to invest part of their payroll taxes into private individual annuities. The Social Security Program has also encountered severe criticisms for the inadequacies in women's benefits. Women have, traditionally, received lower Social Security benefits than men. Because of this benefit gap, the Social Security Program has been under increasing pressure to correct this inadequacy. What type of impact would the Porter Proposal have on eliminating the benefit gap and raising women's monthly benefits? This paper examines both the Social Security Program and the Porter Proposal, under specific conditions, to determine which would generate the highest monthly benefit. The results suggest that Porter's Proposal would generate higher monthly benefits, but only marginally. Over a longer period, however, these benefits would gradually be lower than Social Security , as the Social Security benefits are increased according to the cost of living.