BEYOND THE NUMBERS
In the wake of the recent Supreme Court decision overturning Roe v. Wade, Senator Marco Rubio has renewed his deeply flawed proposal that would force parents to choose between the paid leave they need to care for new babies and their future Social Security benefits. That proposal, which he and Senator Mitt Romney originally introduced in 2019, would undercut Social Security’s benefits and structure, weakening the retirement security it offers workers. The United States needs paid leave, but it shouldn’t be financed by cutting Social Security benefits.
Under the Rubio proposal, parents opting for parental leave would face permanent cuts to their Social Security retirement benefits that ultimately would far exceed their parental leave benefits. The cuts would amount to their parental leave benefits plus decades of interest, as well as an additional reduction to cover the cost of the parental benefits provided to other parents who die or become disabled before they reach retirement and can’t repay their own leave benefits.
For example, parents with moderate incomes would receive about $5,300 in benefits on average for each three months of parental leave they take — but would then lose about $15,100 in lifetime retirement benefits (measured in 2018 dollars) for those three months of leave, according to the Urban Institute.
All told, this amounts to losing about 3 to 4 percent of lifetime Social Security retirement benefits for each three months of leave. So parents who take three periods of parental leave (after three births or adoptions) would lose roughly one-tenth of their lifetime Social Security retirement benefits.
The proposal would treat parental leave benefits like loans that accrue interest. For a typical worker who has her first child at age 27 and claims Social Security retirement benefits at the full retirement age of 67, interest would accrue for 40 years. Over such a long period, the amount of interest would ultimately exceed the amount of the benefit; in fact, the Urban Institute estimates that leave-takers would eventually pay back nearly four times as much as they received in leave benefits, on average. These cuts would weaken retirement security and impose the greatest hardship on women and workers of color, as they already face less secure retirement than others.
Using Social Security partly as a piggy bank rather than an insurance policy is central to the design of the Rubio proposal. Carrie Lukas, president of the Independent Women’s Forum — which first developed this approach — has written that getting workers to see Social Security as assets “to be used now or at retirement” is a first step toward partially privatizing Social Security.
At a time when many workers face shaky finances in retirement, policymakers shouldn’t weaken Social Security, which is most workers’ only source of guaranteed retirement income. Policymakers can provide paid leave without asking parents to sacrifice some of their retirement security. In fact, that’s what every existing state program does, by financing benefits with modest payroll tax contributions. It’s also what the overwhelming majority of workers prefer: when polled about the best funding mechanism for a national paid family and medical leave policy, just 3 percent of voters preferred drawing from the Social Security trust funds.
Parents should never be forced to choose between the paid leave they need and their hard-earned retirement security. Instead, we need a national, comprehensive paid family leave policy that is responsibly financed.