A Budget-Neutral, Bipartisan Approach to Family Leave

Many working parents would like to stay home with their new child, but cannot afford to because the benefit is not offered through work. Low-income parents are even less likely to have such a benefit.

The Cassidy-Sinema plan is a great first step toward helping parents spend those valuable first few months with their babies and adopted children. Under the Tax Cuts and Jobs Act of 2017, parents can claim an annual Child Tax Credit (CTC) of up to $2,000 for each child. The Cassidy-Sinema plan allows most parents to frontload $5,000 from their CTC upon the birth or adoption of a child. If they choose to utilize this option, their CTC would then be adjusted to $1,500 annually over the next 10 years.

• Flexibility and Choice for Families: By allowing parents to receive a larger portion of their tax credit funds upon the birth or adoption of a child, they can choose when to get financial support and how to use it. They have the ability to use the “baby bonus” to pay for costs associated with childbirth, infant care, maternal care, child care if they choose to go back to work, or time off from work to bond with their new baby. Simply put, the money belongs to them — no strings attached.
• Filling the Gap: Because the Cassidy-Sinema plan does not contain any sort of mandate on employers, private sector innovations for Paid Family Leave (PFL) would continue to flourish. This proposal is specifically tailored to help those who most need it. Working parents often receive no benefits, are more likely to be stuck with large medical bills due to insufficient insurance coverage, or have high child care costs when they return to work. Receiving an extra boost through a frontloaded CTC can help ward off debilitating expenses or lost wages for the most vulnerable families. In short, it helps those families who would be under the most financial pressure after the birth of a child — because expanding one’s family shouldn’t be a luxury.

Key Facts

• In 2016, 50% of Americans who took leave had to use savings set aside for another purpose to cover their lost wages due to childcare expenses; 37% took on debt; 41% had to cut their leave time short.
• Studies have found PFL to be associated with better maternal mental health; higher rates of exclusive breastfeeding, and therefore better long-term health outcomes for babies.
• A survey found that 74% of adults support providing workers with 12 weeks of PFL. But <50% say they would support such a program if it meant higher taxes/debt, or lower gov’t spending in other areas.