PUBLISHED TO
Senate Republicans have cooked up another plan,
courtesy Sen. Marco Rubio (R-FL) and Ivanka Trump, to destroy Social
Security. They call it a "paid" parental leave plan, but it's really a
drain Social Security plan in which workers would borrow against their
future security by taking out Social Security funds to take time off
when they have a child or adopt. That would push back the worker's
retirement age, and reduce their earned benefits. The Urban Institute
has analyzed the legislation and found that it's a "scary" tradeoff.
New parents could take between 55 to 80 percent of their regular pre-tax pay for two or three months of leave, delaying their retirement and thus cutting their retirement benefits from 3 to 10 percent, according to Urban Institute's projections. They find that "to cover the cost of parental leave payments, the proposed program would have to raise Social Security's full retirement and early entitlement ages by six months for each paid leave lasting two or more months," cutting the participant’s annual Social Security retirement benefits by an average of $1,120. Which really adds up over the length of retirement: "For each paid leave lasting at least two months, program participants would forfeit $18,830, on average, in lifetime Social Security retirement benefits. The median reduction would be $16,190."
Richard Johnson, one of the authors of the study, told Huffington Post that the proposal is problematic because there's "already a concern about retirement security and income. And people are increasingly entering retirement with mortgages and other kinds of debt. The idea we would reduce those retirement incomes further is scary." The program would be entirely voluntary, but with little other choices for parental leave, workers with little information on the future impacts of the program could be seriously short-changing their retirement security.
The program could also create instability in Social Security that would endanger everyone else's retirement, too. Because while Rubio likes to say it's budget neutral, Urban Institute finds that it definitely is not. It would cost the federal government about $10 billion annually on top of current costs. While the money would eventually be paid back by the program's participants, the government would have to float the costs until that time. Some participants wouldn't be around to pay back the full amount, either, because of having to leave the workforce early or dying before reaching retirement age. That would weaken the program as a whole and give Republicans more ammunition for attacking it and making further cuts in the name of the deficit.
The study's authors also point out that it would change the very nature of Social Security, "designed as a social insurance program to provide basic retirement income and insure people against the financial risks associated with becoming widowed, orphaned, or disabled." This would change the nature of the program, they argue. " Allowing people to borrow against their future retirement benefits to meet their needs at younger ages would begin to transform the program from a social insurance program to a forced saving program."
The U.S. is one of very few countries that doesn't have some kind of employer-based or government-funded parental leave program, and the only developed nation without one. That has to change, but it can't come at the expense of older and disabled Americans.
New parents could take between 55 to 80 percent of their regular pre-tax pay for two or three months of leave, delaying their retirement and thus cutting their retirement benefits from 3 to 10 percent, according to Urban Institute's projections. They find that "to cover the cost of parental leave payments, the proposed program would have to raise Social Security's full retirement and early entitlement ages by six months for each paid leave lasting two or more months," cutting the participant’s annual Social Security retirement benefits by an average of $1,120. Which really adds up over the length of retirement: "For each paid leave lasting at least two months, program participants would forfeit $18,830, on average, in lifetime Social Security retirement benefits. The median reduction would be $16,190."
Richard Johnson, one of the authors of the study, told Huffington Post that the proposal is problematic because there's "already a concern about retirement security and income. And people are increasingly entering retirement with mortgages and other kinds of debt. The idea we would reduce those retirement incomes further is scary." The program would be entirely voluntary, but with little other choices for parental leave, workers with little information on the future impacts of the program could be seriously short-changing their retirement security.
The program could also create instability in Social Security that would endanger everyone else's retirement, too. Because while Rubio likes to say it's budget neutral, Urban Institute finds that it definitely is not. It would cost the federal government about $10 billion annually on top of current costs. While the money would eventually be paid back by the program's participants, the government would have to float the costs until that time. Some participants wouldn't be around to pay back the full amount, either, because of having to leave the workforce early or dying before reaching retirement age. That would weaken the program as a whole and give Republicans more ammunition for attacking it and making further cuts in the name of the deficit.
The study's authors also point out that it would change the very nature of Social Security, "designed as a social insurance program to provide basic retirement income and insure people against the financial risks associated with becoming widowed, orphaned, or disabled." This would change the nature of the program, they argue. " Allowing people to borrow against their future retirement benefits to meet their needs at younger ages would begin to transform the program from a social insurance program to a forced saving program."
The U.S. is one of very few countries that doesn't have some kind of employer-based or government-funded parental leave program, and the only developed nation without one. That has to change, but it can't come at the expense of older and disabled Americans.
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