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February 7 2018

A fiscally responsible paid leave policy even Paul Ryan could love

via The Hill
by Carrie L. Lukas

House Speaker Paul Ryan (R-Wis.) has been a consistent advocate for entitlement reform and limiting the size and scope of government. It's no wonder, then, that he didn't appear enthused when President Trumpmentioned a federal paid leave policy during the State of the Union.

Fiscal hawks like Ryan undoubtedly assume that a federal paid leave policy would grow government, either by creating a new entitlement program that would require new tax revenue or requiring employers to provide workers with paid family leave benefits. Given that Congress's focus has been on rolling back regulations, lowering taxes, and spurring job creation, it's understandable they don't want to start moving in the opposite direction.

But there's good news: There is a way to expand access to paid leave without growing government or burdening business. As explained in this paper written by Kristin Shapiro and published by Independent Women’s Forum, Congress could reform the Social Security program to allow workers to take parental leave benefits following the birth or adoption of a child, in exchange for delaying their Social Security retirement benefits in the future.

The benefits of this approach are numerous: It's completely voluntary and works within the framework of existing programs and laws. It wouldn't discourage companies from providing paid leave benefits on their own or disrupt the situation of the millions of workers who are happy with their current benefit packages. People who don't want or need Social Security parental leave benefits would be unaffected by this reform.  

Yes, this reform would bring the government into yet another area of life. However, it would be an improvement and rationalization of our existing safety net. Some people do face real hardship after giving birth when they are unable to work and don't have paid time off. In fact, nearly half of low-income women who lack access to paid leave end up using public assistance after giving birth.

It is more sensible and fiscally prudent to give people access to benefits when they need them most, rather than forcing them to wait until an arbitrary future retirement date set by the government. Working an extra few months at 67 is unlikely to be a hardship for most Americans, while working the month or two following the birth of a child can be. People should have the freedom to choose when they need their benefit more.

Speaker Ryan has always been concerned about the solvency of Social Security, and for good reason. He will note that — while this program wouldn't worsen Social Security's long-term financial imbalance — it won't solve its problems either, which ought to be a top priority for the country.  

Yet Speaker Ryan also knows better than anyone how politically difficult entitlement reform is. This reform could help by encouraging needed conversations about our entitlement programs and the trade-offs that we face. People may begin to recognize that it’s strange that all workers are required to pay 12 percent of their income while working, when they are younger and tend to have lower incomes and higher other expenses, then receive a massive government payout beginning at age 66, when many are perfectly capable of working, and better off financially than ever before. Adjustments to the retirement age might not seem so unthinkable when put in the context of these trade-offs.

Speaker Ryan is also a realist and should recognize that this is an issue that Republicans cannot avoid. Currently six states have mandatory paid leave laws. Twenty-three additional states are considering paid leave proposals. As more pass, national businesses will increasingly push for federal relief from this patchwork of policies.

Last year, the American Enterprise Institute, along with the Brookings Institution, published a report calling for an entirely new entitlement program with a new payroll tax. Paid leave programs are overwhelmingly popular with the public — including with Republicans. Doing nothing on the federal level on paid leave may be an option for now, but it’s unlikely to succeed for long.

Fiscal conservatives should consider what the options are. None is perfect, and all involve trade-offs. The Social Security paid leave approach seems the best, most realistic option for targeting help at people who really need it, while positively reshaping how the public thinks about government and public safety nets creating the potential for future positive reforms. That's something fiscal conservatives could applaud.

IIndependent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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