Wednesday, July 31, 2019

A paid parental leave program that only Scrooge - or Trump - could love

In this Subscriber’s post, Judd Legum at, reports on a proposal by Republican Senator Bill Cassidy and Democratic Senator Kyrsten Sinema: Paying for your own parental leave.

Paying for your own leave

In his quest for reelection in 2020, Trump knows he must regain some support among women. That’s why he’s targeting women on Facebook with special messages. Among those messages: Trump supports paid parental leave.

This sounds pretty good. The United States is the only industrialized nation to have no mandatory paid maternity leave. As a result, only 17% of employers offer paid leave to new parents. Among low-income workers, just 6% have access to paid family leave.

But what does Trump mean by “paid family leave”? On Tuesday, we learned some details when Ivanka Trump tweeted her support for a new plan by Senators Bill Cassidy (R-LA) and Kyrsten Sinema (D-AZ).

In short, the Republicans will only support a paid leave program if it is revenue neutral: the Cassidy-Sinema proposal “allows mothers or fathers to pay for their own leave by taking a loan and then repaying it through increased taxes over five years.”

Why does the Cassidy and Sinema plan offer no new benefits to parents and simply shift around resources? For example, you could have a version of the Cassidy and Sinema plan that provides a $5,000 benefit to parents without reducing the Child Tax Credit in subsequent years.

The plan is structured this way because Republicans insist that any “paid family leave” plan be revenue-neutral. In order to work with Republicans on this issue, Sinema had to agree to this constraint. Keep in mind, less than two years ago, Republicans unanimously voted for a tax cut package that provided over $1 trillion in corporate tax cuts without any offsets.

But there are different rules for parents. Republicans are insisting that even this most modest benefit for parents be fully paid for by increases taxes on any parent who uses it.

So, one message we might send to Sinema is that “work with Republicans” carries a cost: their way or no way.

It gets worse.

Very low-income workers have fewer resources to accommodate the birth of a new child. But for these workers, the Cassidy and Sinema plan is even worse. These workers, who make less than $12,000 per year, would not be eligible for the full $5,000 benefit. Instead, they could receive a maximum of 12 weeks of their salary. So a “single parent who works 20 hours a week and makes the current federal minimum wage of $7.25” could receive only $1,740. It still has to be paid back over a period of 15 years.

The Cassidy and Sinema plan places the burden entirely on employees. They are funding their leave through future tax increases. Employers and the federal government are paying nothing. According to [a] survey, this is the least popular option, supported by just 2% of voters.

The second-least popular option, drawing early from Social Security, was endorsed by Ivanka Trump last year. Just 3% support that kind of plan. 59% of voters support employers absorbing some or all of the cost.

From a 2017 OECD report:

In almost all OECD countries, the current length of paid leave available to mothers is longer than it was in 1970 and, to a slightly lesser extent, 1990. In 1970, on average across OECD countries, mothers had access to just 17 weeks of paid leave. By 1990 this had increased to about 40 weeks, and by 2016 to just over one year (52.5).

A more progressive proposal in the U.S.

In the United States, even progressive paid leave programs are quite modest. The Family And Medical Insurance Leave (FAMILY) Act, sponsored by Senator Kristen Gillibrand (D-NY) and Congresswoman Rosa DeLauro (D-CT), would “[p]rovide workers with up to 12 weeks of partial income” for leave after the birth of a child or to deal with a serious health condition in their family. During that time, workers would “earn 66 percent of their monthly wages.”

The FAMILY Act would be “funded responsibly by small employee and employer payroll contributions of two-tenths of 1 percent each (two cents per $10 in wages), or less than $2.00 per week for a typical worker.” So the FAMILY Act is also revenue-neutral, but provides new resources to parents, rather than just saddling them with debt.

A separate survey question by the National Partnership for Women & Families found that 80% of Americans supported a proposal like the FAMILY Act.

To restate the obvious, like most things in the era of Trump, the GOPlins beat up on common folk. Suppose each parent has a full-time job. To care for the new-born, one must stay home or spend money to pay for someone to do child care. The Cassidy-Sinema proposal does the latter. It does Scrooge proud.

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