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Michael Hiltzik: The Republican proposal for paid family leave is a sham that would wreck your retirement

Michael Hiltzik, Los Angeles Times on

Published in Business News

Republican Sens. Joni Ernst of Iowa and Mike Lee of Utah have been beating the drums for their "Cradle Act," a proposal to institute up to 12 weeks of paid leave for new parents.

They've been draping their proposal in all sorts of uplifting words about the virtues of family leave -- the bonding of mothers, fathers and offspring, the long-term benefits for children and so on.

But they've concealed the chief drawbacks of their plan, which are the same features that make it palatable to a GOP constituency: It would undermine Social Security, force seniors to work longer, and carry hidden costs that wouldn't be evident until it's too late.

We analyzed this plan last April, when it was being pushed by Ivanka Trump and Sen. Marco Rubio, R-Fla., while Ernst and Lee were standing by in the wings. It was a dumb, even dangerous idea then, and that hasn't changed. It's a poisoned chalice, and you shouldn't drink from it.

The GOP plan contrasts sharply with a Democratic plan offered by Rep. Rosa DeLauro of Connecticut and Sen. Kirsten Gillibrand of New York. Their Family and Medical Leave Act would extend benefits not only to new parents but to workers facing serious medical conditions or the necessity of caring for a family member. It would be funded by payroll contributions of .4 percent of wages -- two cents per $10 of wages -- split between employers and employees.

Moreover, it evades the question of why Social Security needs to be dragged into a program of this sort at all. More on that in a moment.

 

The Urban Institute, which took a close look at the GOP proposal last year, found that it would raise Social Security's annual costs, accelerate its fiscal problems, and open the door to other raids that "could undermine Social Security's ability to ensure basic retirement security for all Americans."

Indeed, the Republican proposals depend on Americans not understanding what Social Security really is about.

Social Security "was designed as a social insurance program to provide basic retirement income and insure people against the financial risks associated with becoming widowed, orphaned, or disabled," the Urban Institute observed. "Allowing people to borrow against their future retirement benefits to meet needs at younger ages would fundamentally change the program from a social insurance program to a forced saving program.... Diverting Social Security to cover nonretirement needs could significantly erode retirement security."

The proponents of raiding Social Security for family leave tend to gloss over the consequences for real-world recipients. Ernst and Lee acknowledge that every week of paid family leave would require two weeks' delay in taking Social Security benefits at retirement -- the full 12 weeks, in other words, would mean a deferral of nearly six months in retirement benefits.

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