The Real Problem With Paid Family Leave Is How to Fund It

(Bloomberg Businessweek) -- Masha Sapper had two weeks of paid family leave from her employer when her daughter Hannah was born 13 months ago. As a single parent, she was determined to spend the physician-recommended 12 weeks at home with her newborn, and relied on her built-up sick days to make up the difference. “I’m very lucky: I’ve been with that company for 15 years,” she says. “Nobody’s with their company for 15 years at the moment. And it took me that long to accrue a lot of sick time.”

Sapper was in Washington on April 30 for the third annual “Strolling Thunder” rally, advocating for paid family leave and affordable child care. Democratic House Speaker Nancy Pelosi, who has long supported a federal paid leave proposal, made an appearance; so, notably, did Representative Ann Wagner, a Republican who represents a district just outside St. Louis. Wagner told the crowd that it was past time to tackle the demands and expense of child care. “We are, sadly, the only industrialized country that does not offer guaranteed paid maternity leave. That must change.”

Wagner survived a competitive reelection bid in a suburban district, unlike many of her Republican colleagues. Now in her third term, she not only restarted the House Suburban Caucus, which had been dormant for nearly a decade, she’s also the sponsor of the New Parents Act of 2019, a bill that would allow new parents to draw on their Social Security benefits to pay for family leave. It’s one of two Republican family leave bills in development, noteworthy from a party that has historically been reluctant to wade into new social programs. A third, which was announced by Senator Bill Cassidy of Louisiana in April and has bipartisan support from Democratic Senator Kyrsten Sinema of Arizona, has yet to be unveiled.

“I’ve followed this for a while now, and this is the closest we’ve ever been to getting the two sides to talk to each other,” says Aparna Mathur, a resident scholar at the American Enterprise Institute and a co-director of a joint report on paid family leave from AEI and the Brookings Institution. And yet, she says, “it may still be two years or three years before we actually get something that both sides are willing to push forward.”

Some 82% of American workers favor paid maternity leave, according to the Pew Research Center, and more than two-thirds support paid paternity and family leave. Though some states have introduced their own paid leave policies, there’s nothing at the federal level, although both President Donald Trump and his daughter and adviser, Ivanka Trump, have called for new legislation. A consensus is growing among both Republicans and Democrats in Congress that something needs to be done. The disagreement is in how to pay for it.

Democrats object to the New Parents Act, co-sponsored by Republicans Marco Rubio of Florida and Mitt Romney of Utah in the Senate, and to the Cradle Act introduced by Republican Senators Mike Lee of Utah and Joni Ernst of Iowa, in part because both rely on Social Security, which they argue is already overburdened. Ernst, who faces reelection in 2020, says she’d be willing to compromise on some aspects of the legislation, but maintains that the bill has to remain “budget neutral.”

“I think there is room for compromise,” she says. “But what we don’t want to do is simply start taxing just to cover some of the expenses that might be there.”

The incentives to compromise are there, with such a large proportion of voters favoring paid family leave and a much smaller percentage—just 13 percent, according to the Bureau of Labor Statistics—who have access to it. And the 2018 election demonstrated that a focus on health care and economic issues helped deliver suburban districts to Democrats. “We did very poorly in the suburbs, which cost us the House,” Senate Majority Leader Mitch McConnell of Kentucky says. “That’s because we lost women by a much larger margin.”

Democrats have offered a paid family leave proposal since 2013, when Senator Kirsten Gillibrand of New York and Representative Rosa DeLauro of Connecticut introduced the Family Act covering parental leave, medical leave, and caregiver leave for up to 12 weeks, paid for by contributions from employees and employers totaling 0.4% of a worker’s wages. (They reintroduced the bills for the current congressional session in mid-February.) Critics of the Republican plans say they don’t go far enough, pointing to paid family leave legislation in six states and the District of Columbia as proof that the program doesn’t need to draw on Social Security to work.

Republican Representative Elise Stefanik of New York, a leader in the effort to recruit Republican women as candidates, is also a co-sponsor of the New Parents Act and has introduced legislation to close the gender pay gap. She says the party is heading in the right direction by focusing on these issues. “In the past, there has been somewhat of a trepidation among Republicans of playing ‘identity politics,’ ” she says. “This is not identity politics. This is just smart policy.”

All of these bills face impossibly long odds of success in the current Congress. “I don’t think anything can get done in this hyperpolarized world we’re in,” says Isabel Sawhill, a co-author of the AEI-Brookings report. “Both sides—Democrats and Republicans—are saying to themselves ‘Well, we’re going to have more power come 2020, and we’ll do it then. So we don’t need to compromise now.’ ”

Perhaps the best hope for a compromise lies in the Cassidy-Sinema bill, but details of the legislation have yet to be released, and the senators are being cautious about how they intend to pay for it. “We have thoughts we’re floating, but we have to get back a score”—that is, a cost estimate—from the Congressional Budget Office, Cassidy says.

In the meantime, for new parents such as Sapper, having kids means a trade-off, something she says makes it harder than it needs to be. “All the moms I know who go back to work that first day, they always reach out to everybody and say, ‘Is it supposed to be this hard?’ ” Sapper says. “I don’t think it’s supposed to be that hard. I think we should be able to be parents and good employees, and I think that means better support for paid parental leave.”

To contact the editor responsible for this story: Jillian Goodman at jgoodman74@bloomberg.net, Anna Edgerton

©2019 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.