Tucked inside the Senate Republicans’ latest tax bill is a proposal they’re touting as a paid family leave plan.
The provision, as written in the version of the bill released Wednesday, offers companies a small tax credit for giving workers as little as two weeks of paid time off for family and medical leave. What’s covered by “family and medical leave” is not clearly defined. The concept is modeled on similar legislation pushed by Sen. Deb Fischer (R-Neb.) for the past few years.
Fischer seems thrilled. “This is a big step toward enacting the first nationwide paid leave policy in U.S. history,” she said in a statement Wednesday.
While the measure is certainly a sign that paid leave has finally become a major bipartisan issue, what’s on offer here will do little to address the needs of new parents in the United States, according to family advocates, some conservative economists and, well, common sense.
“It’s a flimflam,” said Ellen Bravo, co-director at Family Values@Work, a national coalition of paid leave advocates. “It’s pretending to say we’re giving you something new that people urgently need when, in fact, it’s a giveaway to the bigger corporations that can already afford to do it.”
The U.S. is one of just a handful of countries that do not mandate paid maternity leave. It is the only advanced economy in the world that requires no time off for new parents. This failing has devastating economic consequences. For starters, the U.S. has a lower percentage of women in the workforce than most other similarly situated countries. Researchers have even found a correlation between infant mortality rates and the amount of time mothers take off after the arrival of a child.
Even though an overwhelming majority of Americans believe parents should get paid time off to care for a newborn, only 15 percent of U.S. workers currently do, according to federal data. About one-quarter of mothers go back to work less than two weeks after giving birth. Others wind up quitting their jobs and relying on government benefits to squeak by.
There’s increasing awareness among Democrats and Republicans that this is an urgent issue. Even President Donald Trump included a proposal for six weeks of paid time off in his draft budget released in May, although he’s done little to push the matter since.
The Senate’s family leave provision was not part of the tax bill passed Thursday by the House of Representatives, and it’s not clear whether it will make it into the final version of the tax plan.
There are a few problems with the tax credit itself, said Vicki Shabo, a vice-president at the National Partnership for Women and Families. It’s relatively small. A company could pay a worker as little as 50 percent of his or her salary and then would get 12.5 percent of that money back via a tax credit. It offers little incentive for companies to start offering leave ― they’d only get their money back at the end of the year.
And perhaps most disheartening, the tax credit would be temporary, expiring in 2019 ― which hardly gives employers time to get the new benefit up and rolling.
“This is a way for Republicans to check a box that says, ‘We care about paid leave,’ without ensuring any workers are actually getting paid leave,” said Shabo.
Several conservative economists agree. This kind of tax credit would most likely be embraced by companies that already offer paid family leave, wrote Aparna Mathur, a resident scholar in economic policy at the American Enterprise Institute.
“This is only a small step forward in this debate, not a giant leap,” Mathur said. “Much more can and should be done.”
The reality is that no one knows whether tax incentives would translate into more paid leave, Abby M. McCloskey wrote in the right-wing National Review. The approach outlined in Fischer’s earlier bill (which the current measure is modeled on) “leaves much to be desired,” McCloskey said.
Ben Gitis, labor policy director at the conservative American Action Forum, is more optimistic about the provision. “It could work,” he told HuffPost. He likes that the tax credit could be claimed only for workers who earn less than $72,000 a year, targeting those who need paid leave the most.
But he too noted that “no one really knows” if tax credits will ultimately lead to more paid leave.
There is consensus on what would work, Shabo, Bravo and McCloskey pointed out: enacting a policy that gives American workers paid time off. A handful of states ― including California and New Jersey― already offer paid leave. It works like this: Employees and employers, depending on the state, contribute small amounts of money to create an insurance pool that covers paid leave, much the way unemployment insurance works.
“Limited paid-leave programs have been found to increase work-force participation, raise wages, reduce use of government benefits, increase leave times, and improve children’s and mothers’ health outcomes — especially for low-wage parents for whom the alternative is often welfare,” McCloskey wrote.
And she asked: “Why not move forward with a program we know works?”
CORRECTION: A previous version of this story indicated Connecticut was one of a few states that offer paid family leave. In fact, it only offers sick leave.