Budget-Neutral Paid Family Leave

Policy

May 9, 2019

Budget-Neutral Paid Family Leave

Legislation to allow eligible new parents to access Social Security benefits for paid family leave.
Year
2019
Category
Federal
Position
Support

An Innovative Approach to Paid Family Leave

The New Parents Act (S. 920) and The Child Rearing and Development Leave Empowerment (CRADLE) Act are two iterations of paid family leave that would not create a new drain on the federal budget. Both bills allow eligible new parents to access Social Security benefits for paid family leave up to three months, differing slightly in how that benefit is offset. The New Parents Act gives parents the option to increase their retirement age by 3 to 6 months each time the benefit is utilized, or to have a proportionate reduction in their monthly benefits for the first five years of retirement. The CRADLE Act requires delaying retirement two months for each month of paid leave taken, up to six months each time it is used.

Good for Parents, Children, and Society

  • Freedom & Flexibility for Parents: Many working parents would like to stay home with their new child after birth or adoption, but cannot afford to. Nearly half of American families live paycheck to paycheck, and oftentimes those who need paid family leave (PFL) the most don’t have the benefit through work. PFL allows parents to put their children first without fear of financial hardship, as well as providing flexibility in how much leave a family takes and who takes it.
  • Families Flourish: Years of social science show that children have much better outcomes when they bond with their parents during their first few weeks of life. Research shows that the children of parents who took parental leave generally had better health, development, and academic outcomes. No family should have to sacrifice this fundamental relationship with their children just to make ends meet.

Good for Business and the National Budget

  • Employer friendly: Paid family leave utilizing Social Security benefits does not mandate that employers provide paid family leave, nor does it require increased FICA withholding. These plans won’t have a negative effect on wages or employment.
  • Fiscally responsible: Both the New Parents Act and CRADLE Act are budget neutral. They do not create a new tax or add an additional entitlement to an already strained budget. Offering PFL also reduces dependence on current entitlement programs, as many who do not have PFL often turn to public assistance.
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