Rubio's New Paid Leave Bill Threatens The Very Idea of Social Security, Report Finds
Source: HuffPost
By Emily Peck, Aug. 30, 2018, 12:00am ET
His proposal would cut lifetime benefits between 3 and 10 percent and cost $10 billion a year.
The paid maternity and paternity leave bill proposed by Sen. Marco Rubio (R-Fla.) would offer meaningful benefits for new parents but only at a grave cost to Americans’ retirement savings and the core idea of Social Security, according to a new analysis from the Urban Institute.
The nonpartisan think-tank is the first to delve deeply into the particulars of Rubio’s bill, which he unveiled in early August. It’s unclear whether it has enough GOP support to even get off the ground, but the idea of paid leave has been gaining favor with Republicans recently thanks, in part, to the efforts of White House aide and first daughter Ivanka Trump.
Unlike the paid leave bill supported by congressional Democrats that is funded by a small payroll tax paid by employees and employers, Rubio’s Economic Security For New Parents Act taps Social Security funds. The bill provides new parents anywhere from 55 to 80 percent of their regular pre-tax pay for two or three months, but it “borrows” from their future retirement accounts to do so.
The bill’s supporters say the only cost to parents is a slight delay in retirement- which is fine, they say, since Americans want to work longer anyway. Rubio has also touted the bill as “budget neutral.” Neither claim is quite accurate, the new report shows...More...
Read more: https://www.huffingtonpost.com/entry/rubios-new-paid-leave-bill-threatens-the-very-idea-of-social-security-report-finds_us_5b86d4dee4b0162f471ed56b
The new analysis found that a parent using Rubio’s leave benefit would see a significant lifetime reduction in Social Security benefits- between 3 and 10 %; and those who take leave would have to pay back the money, with interest, upon retirement, and at that point, it could be as much as 4 times what they took out.
“There’s already a concern about retirement security and income. And people are increasingly entering retirement with mortgages and other kinds of debt. The idea we would reduce those retirement incomes further is scary."- Richard W. Johnson, a senior fellow at the Urban Institute. The bill raises basic questions about Social Security itself, a highly successful program designed as social insurance to gird Americans against the financial risks of old age. Rubio’s proposal would transform Social Security from mandatory social insurance to essentially a forced savings account.
The US is one of only a small number of countries that don’t offer women some kind of paid maternity leave benefit, and it is the only developed country with no paid leave. Polling shows wide and growing bipartisan support for changing this. The Rubio bill also fails to cover the vast majority of Americans who need paid family leave, for reasons other than a new child. Currently 70% of people who take unpaid leave through the federal family leave act, do so to care for a sick family member including children, or for their own illness.
Ivanka Trump has been pushing the GOP on the paid leave issue.
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