Bi-partisan paid leave plan creates no employer mandate for paid family leave
Child care in America has become increasingly inaccessible. In the U.S., 51% of all residents live in a region with very few, if any, child care providers 3. In 2016, the average cost for center-based infant care was higher than a year’s tuition and fees at a public college in 28 states and the District of Columbia.4
Today, the United States is the only developed OECD country without a formalized mechanism for paid parental leave. The closest alternative currently available is the Family and Medical Leave Act (FMLA) of 1993, which provides job-protected unpaid leave to parents working for large employers, who also meet a number of other requirements. While innovative at its inception, in today’s era when both parents are more likely to work, many cannot afford significant time off without income. For example, in 2016, roughly 37% of Americans had to take on debt to cover parental leave 1. Still, 41% were forced to cut their leave time short due to financial constraints 2.
Congress recently increased the Child Tax Credit (CTC) from up to $1,000 per year to up to $2,000 per year. A bipartisan paid-leave plan that uses the child tax credit (CTC) to provide new parents with immediate funds to finance time off from work or to offset the cost of infant care was released for discussion July 24 by U.S. Sens. Bill Cassidy, R-La., and Kyrsten Sinema, D-Ariz.
Cassidy and Sinema’s proposal would allow the parents of a newborn or recently adopted child under age 6 to accelerate their CTCs to receive $5,000 immediately and $1,500 from their CTC for the next 10 years. These funds could be used to replace income while taking leave from work or to pay for child care if parents work outside the home.
Low-income families that do qualify for the full, refundable CTC would be able to bring forward their CTC benefit to receive the equivalent of 12 weeks’ wage replacement and then receive their adjusted CTC benefit over the next 15 years.
A Different Approach
The plan would not reduce the future Social Security payments of those using the benefit,unlike paid-leave bills introduced by Republican senators earlier this year, and it would not require employers to offer paid-leave time, as Democratic proposals would do. The benefit would be optional, allowing parents to continue receiving their existing CTC if they preferred to do so.
“This is a common-ground solution that can pass Congress and become law,” Cassidy said.
Paid-leave measures that have been released as proposals or introduced in Congress this year include:
- The New Parents Act, put forward by Republicans, which allows parents to draw from Social Security for paid leave that lasts one, two or three months in exchange for delaying or reducing future Social Security benefits. Parents also could choose to keep working full time or part time and use the extra funds to pay for child care expenses.
- The Child Rearing and Development Leave Empowerment (CRADLE) Act, which would let parents receive up to three months of paid leave by giving them the option to postpone Social Security benefits, but it would require parents to take leave from work in order to receive the benefit. Neither this measure nor the New Parents Act has any announced Democratic supporters.
- The Family and Medical Insurance Leave (FAMILY) Act, introduced by Democrats, which provides partial wage replacement for all events for which employees qualify for Family and Medical Leave Act leave, funded by a payroll tax on employers and employees. The bill has no Republican co-sponsors.
1) Renee Stepler, Key takeaways on Americans’ views of and experiences with family and medical leave, PEW RESEARCH CENTER (March 23, 2017), https://www.pewresearch.org/fact-tank/2017/03/23/key-takeaways-on-americans-views-of-and-experiences-with-family-and-medical-leave/.
3) Rasheed Malik et al., America’s Child Care Deserts in 2018, CENTER FOR AMERICAN PROGRESS (December 6, 2018, 7:30 am), https://www.americanprogress.org/issues/early- childhood/reports/2018/12/06/461643/americas-child-care-deserts-2018/.
4) Parents and the High Cost of Child Care: 2017, CHILD CARE AWARE OF AMERICA, http://usa.childcareaware.org/wp-content/uploads/2017/12/2017_CCA_High_Cost_Report_FINAL.pdf(last accessed July 14, 2019).