- White House adviser Ivanka Trump is teaming up with Sen. Marco Rubio to put together a paid family leave plan.
- But the GOP plan would be funded using Social Security benefits, something liberals and even conservative policy experts reject.
- At the same time, Democrats are pressuring Republican lawmakers to support their bill, the FAMILY Act, which would impose a payroll tax to fund 12 weeks of paid medical and family leave.
Ivanka Trump, a White House adviser and daughter of President Donald Trump, is fighting to make progress on one of her top priorities since coming to Washington – paid family leave.
But her plan, which she’s working on with Sen. Marco Rubio, is coming under fire for disadvantaging women and potentially putting families in a precarious financial position.
For her part, Ivanka is branding the policy as pro-business and pro-worker, steering the conversation away from entitlements or government giveaways.
“Providing a national guaranteed paid-leave program – with a reasonable time limit and benefit cap – isn’t an entitlement, it’s an investment in America’s working families,” she wrote in a letter to The Wall Street Journal in July.
But how the government will pay for this proposed program remains a cause for concern.
Pulling from Social Security
While the details of the proposal remain unknown, Rubio told Politico this week that he plans to fund the program, which would offer six weeks of parental leave, using Social Security benefits, a new idea circulating in conservative circles. Under this system, workers would draw from their Social Security retirement benefits, delaying their benefits once they retire.
This would make the program budget neutral, offer a national solution, and minimise administrative costs as the Social Security administration already has much of the infrastructure to implement the program.
But Aparna Mathur, an economist at the conservative American Enterprise Institute who has worked with Ivanka on paid leave, says she has several major concerns with the Social Security funding scheme.
Mathur worries it would drain the already under-funded program of its resources and drive it towards insolvency even more quickly. And she’s concerned the program wouldn’t ensure job protection for low-wage workers who are not guaranteed they will get their job back when they return from leave.
“Who are you really targeting?” Mathur said. “If you’re not really doing much for the lowest-wage workers than it’s just another entitlement program for middle-class workers.”
Mathur also fears that the program would encourage families to make financial calculations, discouraging men, more often the higher-earning parent, from taking time to care for a child or family member. Women are thus left to shoulder the burden and draw from their already more limited retirement benefits.
Liberal critics agree.
Vicki Shabo, vice president at the non-profit National Partnership for Women & Families, said the system would “reinforce caregiving norms” and “jeopardize” Social Security.
Sen. Kirsten Gillibrand, a New York Democrat who has led the Democrats’ efforts on the issue, shot down the proposal on Wednesday.
An aide to the senator told Business Insider that she has not discussed the proposal with the White House and last engaged with Ivanka and her team on the issue in March.
Washington Post columnist Elizabeth Bruenig called the plan a “highly individualized” way of dealing with issues which “by their nature are communal.”
“Your family, your choice, your problem,” she wrote.
Paid leave for the ‘cost of a cup of coffee’
At the same time, Democrats are ratcheting up the pressure on the White House by pushing their bill, the Family and Medical Insurance Leave (FAMILY) Act, which Gillibrand reintroduced a year ago and is now endorsed by 27 Democratic senators.
“If the president was really serious about creating a paid leave program that would help all workers, he would support my #FAMILYAct,” Gillibrand tweeted the day after the president’s State of the Union speech. “Actions speak louder than words.”
The plan would allow workers to earn 66% of their income for up to 12 weeks in order to care for their own health needs, a new child, or a sick family member. And it would be funded by a small payroll tax – two cents for every $US10 a worker earns – which Gillibrand says would amount to the cost of a cup of coffee per week.
Democrats drew attention to the issue this week, as it marked 25 years since President Bill Clinton signed the Family and Medical Leave Act (FMLA), which provides some workers with up to 12 unpaid weeks of leave to care for a child or a sick family member or recover from illness.
Advocates for the FAMILY Act, which has broad support among policy experts, argue the US already has a battle-tested plan as several states have implemented their own programs over the last decade, which have been largely popular and effective. They say the federal proposal is a more conservative version of what states like California and Washington have put in place.
Heather Boushey, the executive director of the Washington Center for Equitable Growth, said that research has shown that Americans are willing to pay a reasonable tax for a benefit they need and want.
“What we’ve learned is that people have been willing to say, ‘this is important to me,'” Boushey told Business Insider. “The benefit far outweighs the small cost.”
The business community is on board
The country’s 20 largest employers voluntarily offer paid parental leave to at least some portion of their employees. Among these, IBM offers the most generous benefits, with 20 weeks of paid time off for salaried and hourly birth mothers and 12 weeks for other parents. (UPS offers the least generous, with six weeks for salaried birth mothers, but no paid time off for hourly workers of any kind or other parents.)
Other companies, including Netflix, offer up to a year of paid time off for new mothers.
And a growing number of businesses have endorsed the FAMILY Act, including Adobe, Care.com, Eileen Fisher, Levi Strauss, Patagonia, Spotify, and Uncommon Goods.
“We understand that not all companies can provide family and medical leave like Adobe can,” Donna Morris, an executive vice president at Adobe, wrote this week. “That is why Adobe supports The Family and Medical Insurance Leave (FAMILY) Act.”
After 25 years of the FMLA, it’s time to take the next step. At @patagonia, we proudly provide #paidleave to our employees and call on Congress to pass the #FAMILYAct, which would provide affordable, inclusive paid leave for ALL workers. @NPWF #FMLA25 #PaidLeaveMeans pic.twitter.com/AWZeDmzsvz
— Patagonia (@patagonia) February 5, 2018
While businesses use their paid leave offerings to attract and retain workers, without a government-funded program, all of the costs of providing the benefit lie with the business. Advocates argue that a social insurance program would take much of the strain off of employers.
Betsey Stevenson, a professor of public policy and economics at the University of Michigan, said, “I think it’s quite reasonable for the business community to say back to Congress, ‘This is something for you to think about how we manage this across the country and you should take this off our plates so we can think about how we run our business.'”
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