Can conservatives make paid family leave work?
In a perfect country, Senator Marco Rubio's new bill would be the perfect conservative compromise on paid family leave, successfully addressing a policy that has become increasingly popular with the electorate but with few comprehensive solutions coming from the right. The Economic Security for New Parents Act offers the opportunity for parents, after the birth or adoption of a child, to opt into receiving early Social Security payments for at least two months after, allowing them to care for their newborn or adoptee when they most need the money to do so. Unfortunately, the Social Security trust fund in that aforementioned perfect country, unlike ours, is not slated to be depleted by 2034.
It is too harsh, however, to dismiss the proposal for that reason alone. Despite it being impractical for the long term, the idea is – hypothetically – the most fiscally responsible and individual liberty-protecting we have seen, especially when contrasted with Senator Kirsten Gillibrand's FAMILY Act.
Most notably, Rubio's bill requires no additional payroll taxes to fund the benefits received. Instead – according to his office's summary – those who are "taking the option will delay the date at which they begin receiving Social Security retirement benefits by 3 to 6 months per benefit taken." This is important because while Gillibrand and Co. claim that the FAMILY Act – which covers both new parents and those with "serious personal or family health issues" – would be appropriately funded by a 0.2% employer and employee payroll tax, such a conclusion is doubtable. This can be seen by examining the statistics compiled by the Urban Institute on the four current state-level paid family leave programs, which are California, New Jersey, Rhode Island, and New York. Note that the "Financing of benefits" section includes the payroll taxes required to fund each state's disability insurance pools as well, since these paid family leave programs piggyback on top of their existing infrastructure. New Jersey will be used as the prime comparative example in this case, as it was lauded as particularly effective in the FAMILY Act Fact Sheet.
While proponents of the FAMILY Act are quick to point to New Jersey's seemingly low cumulative payroll tax rate of 0.34% – 0.1% for paid family leave specifically – they do so without providing the proper context. A major reason why the cost is so low compared to other states is because employers pay a far greater amount into the leave fund – employers are required to contribute anywhere from 0.10% to 0.75%, up to the first $33,700 earned by the worker. Additionally, in a report issued by the left-leaning New Jersey Policy Perspective, it is shown that only 12% of eligible New Jerseyan parents take advantage of the program, primarily due to the state's low maximum weekly benefit cap, which rests at $605. This is not endemic to New Jersey; despite higher caps and much higher payroll tax rates, California and Rhode Island are able only to maintain low usage rates of 17% and 13%, respectively. Clearly, if the FAMILY Act intends to provide widespread support for all of those in need, it must learn from these examples – the benefit cap would have to be expanded even more than it already is in California, necessitating an increase in taxes as well.
Improving the maximum is not the only facet of the system that needs to be upgraded. According to the former N.J. Department of Labor and Workforce Development commissioner, Aaron Fichtner, benefit claimant requests would take up to 45 days to successfully process, with even more waiting added on top of that until accepted applicants could receive their first payments. Could you imagine desperately needing to take care of a deeply ill family member, only to find out that you will not even know until a month and a half later if you were approved to take a paid leave? Thus, because Senator Gillibrand is basing her projections off misleadingly low-cost states like New Jersey, it can be seen that significantly more funding is needed to meet the requirements for both administrative and benefit expenses. The former's cost is likely even higher, since the FAMILY Act creates an entirely new "Office of Paid Family Leave and Medical Leave," instead of going with the far cheaper and more efficient option of building off existing disability insurance infrastructure,
To move away from the more quantitative aspects of this critique, there is another central distinction that is arguably even more laudable. That is, in an era of individual mandates and pushes for increased distribution of one's costs onto others, the Economic Security for New Parents Act rightfully returns financial agency from the ever-expanding government to the American taxpayer. As opposed to being forced into paying for an economic decision that 88% of eligible New Jerseyans will never use, the Rubio bill empowers families with the freedom of choice: you can decide for yourself if the benefit of money now is worth a delay in retirement later. As increased government control continues to become the "flavor of the month," it is doubtful that we will see opportunities like this in the future.
That being said, you cannot build a skyscraper without a solid foundation, and right now, Social Security is anything but stable. It would be irresponsible to create policy that builds off financially endangered institutions, so even in recognition of the sorely needed freedom that it provides, we must remain grounded in the reality of our situation.
Although Rubio's plan cannot be done without Social Security solvency, perhaps it will serve a different, yet equally important function: bringing attention to the fact that without urgent action, generations of taxpayers are paying for benefits they will never see. Fixing it requires extensive bipartisan cooperation, so it is hoped that organizing a bipartisanly popular program such as paid family leave can bring the issue the focus it deserves.