Rubio’s New Parental Leave Plan Is Funded With Your Retirement Savings

Critics say it's a backdoor Social Security cut that would particularly disadvantage women and leave out most people who need paid leave.

Senior Reporter, HuffPost

Senior Politics Reporter, HuffPost

WASHINGTON ― Sen. Marco Rubio (R-Fla.) and Rep. Ann Wagner (R-Mo.) unveiled a novel idea for offering parental leave to more Americans on Thursday: Having them pay for it with their own retirement savings.

Instead of mandating that employers cover paid family leave, or proposing new sources of revenue to pay for it, the proposal would give new parents the option of dipping into their future Social Security retirement benefits so they can have time off to care for a newborn. The trade-off would be significant: lower Social Security benefits for life ― and possibly waiting as much as a year longer to retire, according to analysts.

“It’s an option. It’s akin to what people are now do with their 401(k), which is to make an early withdrawal,” Rubio told HuffPost on Wednesday. “It’s their money, you just have a choice whether you want some of it now, or all of it later.”

“If someone has a better idea that doesn’t involve raising taxes, we’ll be interested in it,” he added.

Under the proposal, titled the Economic Security For New Parents Act, those who choose to withdraw from their Social Security benefits early will be able to get at least two months of leave after the arrival of a child by birth or adoption.

Parents making $70,000 a year would get two months of payments equivalent to about 70 percent of their income ― enough to cover expenses, according to a summary from Rubio’s office. The plan would allow parents to transfer all or part of their benefit to their spouse, as well as make stay-at-home parents who have an “earnings history” eligible to withdraw from their retirement savings.

Significantly, the bill leaves out those who need to care for sick family members or tend to their own serious health issues. About 75 percent of those who take unpaid time off through the federal Family and Medical Leave Act use the time for those purposes. All six states that have paid-leave policies include provisions for this type of family leave.

The U.S. is one of only a handful of countries in the world that does not provide some kind of maternity leave benefit to new parents. Yet an overwhelming majority of Americans approve of the idea of paid leave. Rubio is the first Republican legislator to float a significant parental leave proposal, a sign of how popular the issue has become, and of the persistent efforts of Ivanka Trump, who has pushed for legislation.

Paid leave has long been a goal of progressive groups and some Democratic politicians who already support the Family Act, a bill that would fund leave through a small payroll tax.

“You’re asking someone who is probably in their 20s or 30s to take a gamble and try to predict what their whole life is going to be like.”

These advocates were quick to criticize the GOP plan, calling it essentially a backdoor attempt to cut Social Security benefits that would particularly disadvantage women , low-income Americans and people of color ― who already see lower benefits in retirement.

“A program that only covers parents caring for new children, provides no leave for family care and personal medical needs, and forces parents to choose between paid leave and retirement security is absolutely the wrong way to go,” Debra Ness, president of the National Partnership for Women & Families, said in a statement Wednesday. “In fact, it is reckless, irresponsible and ill-conceived. This is a Social Security benefit cut for the working people who need Social Security the most.”

The bill is largely based on a proposal released earlier this year by the Independent Women’s Forum, a conservative group founded in 1991 by women defending then-Supreme Court nominee Clarence Thomas from accusations that he sexually harassed Anita Hill. More recently, the group has decried the Me Too movement and downplayed the role that discrimination plays in the gender pay gap.

The group’s president has even said that its paid leave idea would have the added effect of changing Americans’ views on Social Security ― making it less like an untouchable retirement fund and more like a piggy bank available whenever you need cash.

“Indeed, encouraging people to think about Social Security’s assets as if those benefits are their property for use now or at retirement could even encourage people to want to move more in that direction and transform the current pay-as-you-go system into one that pre-funds future benefits and with assets that belong to individuals,” Carrie Lukas wrote in a February piece for The Federalist.

Lukas claims many Americans don’t want that much money when they’re older ― since they need it now ― and are happy to work longer into old age.