By proposing six weeks of paid leave for new mothers and fathers and adoptive parents as part of his fiscal 2018 budget as expected next week, President Trump will be seeking an historic change in U.S. family and medical leave practices long sought by Democrats and family advocacy groups.
If ultimately embraced by Congress and state governments, the U.S. would relinquish its dubious distinction of being the only developed country that doesn’t offer new parents even a few days of paid time off. Under the existing Family Medical Leave Act, workers today can take up to 12 weeks of unpaid leave after the birth of a child, but only at companies with at least 50 employees.
Trump’s proposal would change that, making it possible for parents to continue to receive the equivalent of at least part of their salaries while caring for newborns. The program would cost an estimated $25 billion annually and benefit roughly 1.3 million people, White House officials told reporters on Thursday.
While White House officials who briefed reporters on background provided few details of precisely how the program would work, it was apparent that the administration intends to shift most of the burden for funding and administration to the states.
Under this approach, state governments would be mandated to offer leave payments through their existing unemployment insurance programs and would have to offset the cost through cuts in unemployment insurance or by raising taxes, according to media reports. White House officials insisted this approach would provide states with “flexibility” to implement the program or to opt out if they create an alternative paid leave system.
Currently, only three states – California, Rhode Island and New Jersey – offer new parents six weeks of paid leave and finance it by dipping into temporary disability insurance funds, according to The Washington Post.
According to the Bureau of Labor Statistics 2015 National Compensation Survey, just 13 percent of workers had access to paid leave specifically tailored to care for a newborn child, an adopted child, a child who was sick, or a sick adult relative. Meanwhile, 38 percent had access to short-term disability insurance that provides cash benefits for non-work related medical conditions, including maternity and childbirth.
The proposal, reportedly the brain child of Ivanka Trump, the president’s daughter and domestic adviser, expands on a 2016 Trump campaign promise that would have only benefitted biological mothers, with nothing for fathers or adoptive parents. That much narrower approach drew criticism from Democrats and family rights’ group that claimed it amounted to gender discrimination.
Jeffrey Hayes, program director of job quality and income security at the Institute for Women’s Policy Research, said today in an interview that a lot will depend on the details of the program, including the level of income support and the range of reasons for taking time off, but “It is still a big step forward.”
However, Trump’s plan is likely to encounter resistance from the business community, which would have to absorb the cost of the lost productivity, and from conservative lawmakers including House Speaker Paul Ryan (R-WI), who has voted against other paid leave programs because of the onus it puts on employers.
Moreover, many states would struggle to find the necessary funding in their unemployment insurance funds that were depleted during the recession.
“I do think it would take an influx of new cash, and probably from the federal level, to make it go,” Hayes said. “It is going to be quite a bit of money.”
One of the many unanswered questions is how much money new parents would receive from the government during their leaves and whether it would be sufficient to tide them over – especially for low income families with limited resources. Because Trump’s proposal would not set a minimum level of subsidies, the benefits likely would vary substantially from state to state.
Trump’s program also would not be means tested, meaning that there would be no income limit to qualify. However, administration officials said that higher earners would see their benefits capped.
A January report by the Institute for Women’s Policy Research examining five different approaches to family and medical leave policies at the national level projected that benefit costs as a share of national payrolls would range from 0.45 percent to 0.63 percent of payrolls, depending on the generosity of the model simulated.
Among the study’s key findings: A new national paid family and medical leave policy would increase by six percent to 11 percent the number of workers taking leave every year, and paid leaves would average between $428 to $493 per week, depending on the model of the program.
“A national policy of paid family and medical leave would fill a large existing gap in American workers’ income security,” the report stated. “Most workers lack sufficient paid time off reserved for substantial family and medical needs.”