Ivanka Trump’s Paid Family Leave Policy Puts Parents’ Financial Future at Risk

It's a terrible idea.

by Dave Baldwin
Originally Published: 
GETTY; Fatherly Illustration

Ivanka Trump’s paid family leave policy is finally gaining some traction. After months languishing on the Congressional back burner, a Senate Finance subcommittee addressed her proposal yesterday in a bipartisan hearing aimed at shining a new light on the popular, but deadlocked, issue. Trump didn’t speak on the plan ⏤ instead letting Iowa Senator Jodi Ernst make the case while she nodded approvingly from the front row ⏤ but did publish an op-ed in advance of the meeting to rally support. The problem, of course, is that the plan she’s proposing isn’t a solution at all ⏤ and it shouldn’t be supported. It’s a clever bait-and-switch that puts the financial future of parent’s at risk while weakening the country’s safety net.

In short, Trump’s proposal would guarantee new parents up to 12 weeks of paid leave, at around 45 percent of their salary, but require they pay for it with an advance on their Social Security benefits. The plan only covers new children ⏤ paid time off to care for a sick parent or to battle a personal illness isn’t included ⏤ and recipients of the leave would have to delay their retirement by an as-of-yet undetermined number of weeks.

Obviously, it doesn’t take a keen eye to see why this policy is flawed. There are myriad problems with the approach but none more so than the fact that it’s not actually a benefit at all! It’s literally an advance on your own retirement savings. The government isn’t helping parents in the least, other than to front them their own money like a loan shark. And that’s not even helpful, considering that in order to pay for said maternity or paternity leave, they have to leverage their financial future by depleting their retirement accounts. It’s a way for the government to look like it’s offering a basic benefit most governments offer ⏤ the U.S. is the only industrialized nation in the world without a paid leave policy, by the way ⏤ without actually doing so. It doesn’t give parents money they didn’t already have. Rather, “it’s robbing from your retirement to be able to care for your loved ones now,” said Sen. Sherrod Brown (D-OH) in yesterday’s hearing.

Not only that, but new parents are already confronting difficult financial choices in order to have children. Due to skyrocketing childcare costs and the crippling price of home ownership, many parents aren’t even able to save for retirement ⏤ or are, at least, forced to push it off until later in life. Social Security could be critical to this generation of young parents and tapping into it at age 33 could put them in a decidedly more precarious spot when they hit 73.

And that’s assuming the Social Security Trust Fund is even on stable ground that far down the road. While the fund is currently solvent through 2037, Ivanka’s proposal has the potential to destabilize if not strain the system. If young contributors start withdrawing funds earmarked for retiring Boomers, the fund would likely drain much faster and additional taxes would need to be levied to return it to solid footing. There’s a reason Social Security is off limits until you reach retirement age. It’s a safety net designed to protect people from themselves. And it works as designed. It was never meant to be piggy bank you crack in case of emergency.

Interestingly, the proposal isn’t actually Ivanka’s idea at all, but the brainchild of the Independent Women’s Forum, a conservative think tank that focuses on women’s economic issues. And it’s unclear whether the Trump administration even supports it. The president’s current budget offers an entirely different approach, guaranteeing six weeks of family leave to be paid for with unemployment insurance, and the entire situation has something of a “let my daughter work on an issue she feels is important but we’ll ignore what she comes up with in the end” kind of feel.

That said, the proposal is supposed to be a step up from the current Family Medical Leave Act, which requires employers with 50 or more workers grant parents 12 weeks of protected leave but allows it to be unpaid. Democrats like New York Senator Kirsten Gillibrand meanwhile have proposed the FAMILY Act. It would provide 12 weeks of paid leave at about 66 percent of a person’s salary ⏤ includes time off due to illness or to care for sick relatives ⏤ and would be funded with a payroll tax. Nonetheless, the Ivanka-championed IWF plan is scheduled to be introduced in the Senate this week by Senators Ernst, Marco Rubio (R-FL), and Mike Lee (R-UT) and a full-throated debate between the competing proposals will no doubt ensue.

Considering that 82 percent of Americans favor some sort of federal paid parental leave policy, hopefully, compromise can be struck. In any case, one thing is clear: The answer cannot involve parents raiding their retirement accounts to pay for diapers, even if the government says it’s okay.

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