A Legislative Unicorn: Paid Family Leave Without New Taxes or Entitlements

It seems too good to be true. On Tuesday, Senators Joni Ernst (R-Iowa) and Mike Lee (R-Utah) unveiled the CRADLE Act, which would allow new parents to take paid family leave without requiring new taxes or a new entitlement program. Businesses would not have to pay their employees for this time, and parents would be able to take up to three months off.

How is this possible? Ernst, Lee, and Patrice Onwuka, a senior policy analyst at the Independent Women’s Forum (IWF), explained how it would work at a press conference on Tuesday.

“Our plan allows new parents the opportunity to elect to receive a paid leave benefit through Social Security. In return for receiving these benefits, participants would defer the activation of their social security benefits upon retirement,” Ernst explained.

“The CRADLE Act allows working parents to spend time with their newborn,” she added. At the same time, the legislation “also recognizes that working parents are by definition an essential part of many businesses. Few businesses can afford more taxes or more cuts to their bottom line.”

“A mother or father who chooses to bear or adopt a child, has by that moment been paying into the Social Security system for years, will be paying into the social security system for decades, and ought to have the option if he or she chooses to be able to take some of that benefit at the moment of their child’s arrival into their home,” Lee added. “Families, of course, are the bedrock of our society.”

Onwuka praised her employer, the Independent Women’s Forum, for offering her paid family leave. Her husband’s employer did the same. Even after the leave has ended, she was able to incorporate her work into caring for her young son.

But not every company can offer this benefit, the IWF analyst added. “How do you expand paid leave in a way that doesn’t burden the workforce, burden employers?” This proposal “allows workers to tap into the money that we’ve already been paying Social Security.”

“No new taxes, no entitlements, no new mandates,” Onwuka quipped. “It avoids those unintended consequences that sometimes hurt women in the workforce.” Some laws that would force companies to pay for family leave actually have the perverse effect of encouraging companies not to hire likely parents, and especially women.

Rather than demanding new taxes, a new entitlement program, or onerous rules on businesses that might incentivize them not to hire women, Ernst and Lee proposed a voluntary system where parents effectively borrow against their retirement to spend vital time with their newborns.

As the senators explained in a press release, “The CRADLE Act would allow both natural and adoptive parents to receive one, two, or three months of paid leave benefits by giving them the option to delay activating their Social Security benefits for two, four or six months. Expectant parents would simply fill out a form to notify the Social Security Administration (SSA) of their intention to take paid leave before an expected birth or adoption.”

Millions of working moms and dads in #Iowa & across the country, face huge hurdles in taking time off to spend with their newborns. My paid parental leave plan w/@SenMikeLee is a path forward for a program that is:
✅budget neutral
✅voluntary for employees
✅family focused pic.twitter.com/Nci30aDntj

— Joni Ernst (@SenJoniErnst) March 12, 2019

“It was an honor to be invited by Senators Ernst and Lee to share why the time is now for a common-sense approach to paid leave,” Onwuka told PJ Media. “If we want women to stay in the workforce rather than go on public assistance, and if we want to give new parents the choice to access benefits for time off in a responsible way, this is a great idea.”

“No new taxes on workers and employers, no new mandates that can lead to negative unintended consequences for women, and no new entitlements,” she said, echoing her speech from earlier. “I’m glad that Senators Lee and Ernst were inspired to turn this idea of Social Security Earned Leave, a solution by the Independent Women’s Forum, into legislation.”

Many proposals from the Left tend to favor tax increases (especially payroll taxes, which hurt employees) or mandating businesses to pay for family leave. Contrary to such proposals, Onwuka insisted that “securing paid leave for workers who don’t have it does not have to take money out of the paychecks of all hard-working families.”

“It’s unfair to all those workers who don’t have children and don’t want or need paid leave benefits to have to pay for it,” she said. “That’s why an idea like Social Security Earned Leave as reflected in the CRADLE Act is so powerful.”

At the press conference, Mike Lee was asked how he would respond to critics who attack the CRADLE Act for removing retirement benefits.

“First of all, anyone can choose whether or not to participate in the program. Secondly, those who are eligible to participate in the program I think are likely in many instances to want to take it,” Lee said. “It is a trade-off, but it is a trade-off that I think many will be willing to take.”

“As a mom, I know that being a parent is never an easy task,” Joni Ernst said in unveiling the legislation. Through the CRADLE Act, she aims to provide more options for mothers and fathers. As the father of an unborn baby girl, I heartily endorse this solution.

Follow Tyler O’Neil, the author of this article, on Twitter at @Tyler2ONeil.