Buzz
Senator Marco Rubio from Florida and Ivanka Trump may have proposed a new parental leave policy, reportedly inspired by this proposal from The Independent Women’s Forum: New parents would receive 12 weeks of leave, earning 45 percent of their usual salary (similar to Social Security disability benefits). In exchange, they would sacrifice six weeks of Social Security benefits when eligible.
You might remember that during the election, Ivanka Trump presented herself as a supporter of the Working Mom. While deflecting questions about her father’s treatment of women and her company’s leave program, Ivanka was said to take parental leave very seriously. In fact, she helped shape her father's initial parental leave policy, which suggested offering six weeks of paid leave to new mothers, whether by birth or adoption.
That plan was rightfully criticized: Effective leave policies must also cater to men, not just because some families are composed of men alone, but because fathers taking parental leave has been linked to improved outcomes for the baby, the mother, the father’s relationship with the baby, and the workplaces of both parents. (Though the plan is no longer available online, I discussed some of its shortcomings at the time.)
While this new proposal is supposedly available to both men and women, it underscores a growing issue: It would only make the United States’ retirement crisis worse.
The Crisis of Retirement in America
Chances are, you’ve read at least a few articles discussing the troubling state of American workers and their financial futures. Many of us don’t have enough savings to cover even a small emergency. Medical bills, student loans, and credit card debt have us overwhelmed. Employers have stopped offering pensions, and as the gig economy and freelance work grow, retirement savings accounts are dwindling—or are nonexistent.
A significant portion of the population—around 40 percent of workers—has no retirement savings at all, and will depend almost entirely on Social Security when they retire. This proposal would only worsen the situation for those workers.
The Independent Women’s Forum plan suggests that if you have children, your full Social Security benefits would be delayed from age 67 to 67 and six weeks, with further delays if you have more children. It also overlooks the fact that Social Security isn’t solely for retirement: it also provides disability and survivor benefits. Would these benefits be affected? (Virginia Representative Tom Garrett has proposed a similar plan, where you could use your Social Security to pay off student loans if you agree to push back your retirement age.)
Social Security isn’t a free fund for politicians to use on their personal projects. We contribute to it with the understanding that it will support us in our later years. Moreover, the Social Security trust fund is already facing insolvency issues—a problem that lawmakers like House Speaker Paul Ryan have eagerly pointed to, especially when it involves cutting future benefits—and these problems need solutions, not exacerbation.
It’s infuriating when you consider that Kristin Shapiro, the plan's author, estimates the cost of the benefit at around $7 billion annually. The GOP recently handed out $1.5 trillion in tax cuts to corporations over the next decade. Was there no space in that deal for paid leave?
Also keep in mind that the Trump administration paused a financial regulation designed to make sure your financial advisor acts in your best interest when advising you on retirement investments. As a result, we stand to lose $10.9 billion in savings over 30 years, as advisors fill their pockets with potential 401(k) contributions. Trump also signed House Resolution 67, which eliminated an Obama-era Department of Labor rule that encouraged cities to create auto-IRA programs for private-sector workers. Put together, these actions don't add up to a secure retirement, if there’s one at all.
A Better Solution
Supporters of the proposal argue that parents currently receive nothing other than 12 weeks of unpaid leave, so this is an improvement.
It may offer short-term relief, but an even better alternative comes from New York Senator Kirsten Gillibrand. Her proposal would offer 12 weeks of paid leave for new parents, covering up to 66 percent of their salary, and would also extend to those caring for a seriously ill loved one. It would be funded by a 0.4% payroll tax. According to Politico, Ivanka Trump has also “discussed raising payroll taxes or otherwise contributing to Social Security to establish a new, personal paid leave fund” in private talks. She should continue these discussions.
One could argue that Gillibrand’s plan unfairly impacts those without children, except for the fact that children will eventually be the ones supporting the country’s Social Security and Medicare systems. On the other hand, the Rubio-Trump proposal penalizes those who have children by delaying their retirement. A party that prides itself on family values really needs to reconsider if that’s the message it wants to send.
What Rubio and Ivanka Trump are aiming for is a commendable objective—paid parental leave is long overdue in the U.S. While the two have positioned themselves as leaders in the conversation, it’s actually Nebraska Senator Deb Fischer who, according to Politico, played a key role in passing one of the more notable parental leave policies in recent years: A tax credit for businesses that provide paid family and medical leave to their employees, included in the GOP’s recent tax bill. It’s a step in the right direction, but a nationwide mandate would be far better for all working families.
“Social Security is based on the belief that it’s more important for workers to have their money when they’re older than when they’re younger,” reads the IWF’s fact sheet. “However, many new parents may reasonably decide that 12 weeks of paid leave to care for their newborn is worth deferring their retirement benefits for a short time.” They might also reasonably want both paid leave and full retirement benefits, just like every other industrialized nation. It doesn’t have to be a choice between one or the other.
