Should Social Security Be Used to Fund Parental Leave?
Social Security Advocates Weigh In
Nancy Altman, president of Social Security Works, agreed in an email to ThinkAdvisor that the New Parents Act “has so many shortcomings that it is opposed by progressives and conservatives alike.”
While professors de Rugy and Blahous “are correct to oppose the Rubio-Romney proposal, they are wrong on a number of their specific concerns,” Altman said.
Contrary to their views, “Social Security is a perfect vehicle for long-needed paid family and medical leave,” Altman argued, as it “is insurance against the loss of wages in situations where expenses often increase. Those situations include paid family and medical leave, both of which should be added to Social Security. This would be completely consistent with President Franklin Roosevelt’s vision. Indeed, he considered including short-term disability in the Social Security Act of 1935, but ultimately decided to proceed incrementally.”
Altman continued that it’s “long past time that the United States joins the rest of the industrialized world in providing paid family leave. But in no circumstance should anything like the Rubio-Romney proposal, which forces people to forfeit a large portion of their future retirement benefits if they take parental leave, be enacted. It would undermine working families’ economic security in general and Social Security in particular.”
Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, told ThinkAdvisor in a separate email that his group “strongly oppose[s] Senator Rubio’s New Parents Act because it asks Americans to sacrifice some of their future Social Security income in exchange for paid family leave.”
There’s “no doubt that parents would greatly benefit from a federal paid family leave program,” Richtman said. “But today’s parents will need every dollar of their future Social Security benefits, given the ever-rising cost of aging in America.”
The Mercatus Center, Richtman continued, “is correct that the New Parents Act is bad policy, but mostly for the wrong reasons. While it’s true that Social Security should not be a piggy bank for unrelated benefits, Mercatus is using the Rubio bill to promote the myth that Social Security will not be there for future retirees.”
Social Security’s chief actuary estimated that the New Parents Act “would have a negligible long-range impact on the Social Security trust fund,” Richtman maintained.
Chances of Passage
Rubio’s bill has only one co-sponsor — Romney, Richtman said. “And any change to Social Security requires 60 votes in the Senate. So I don’t see this bill moving any time soon.”
Mercatus’ de Rugy added in a separate email to ThinkAdvisor that since Roe v. Wade was overturned, “legislators on both sides of the aisle have pivoted their focus towards women, parents, and raising families. In terms of political feasibility, Democrats overwhelmingly support the notion of federally paid parental leave and key Republicans are now joining the effort.
“However, they completely disagree with the ways to go about it, and Democrats are radically opposed to the idea of taking money from seniors to give to parents. So, this [New Parents Act] bill is unlikely to go anywhere.”
That said, she continued, “it is worth making the case for why the Social Security trust fund is a bad idea to solve this problem. Once you put into people’s mind that Social Security taxes are up for grab for any other priorities than retirement benefits, we could see new proposals emerging to do just that.”
