04/15/2019 | Press release | Distributed by Public on 04/15/2019 16:06
Washington Examiner April 11, 2019
A paid family leave bill from Sen. Marco Rubio, R-Fla., that would let new parents tap into their Social Security in exchange for delaying retirement would not harm Social Security's finances, according to an analysis released Tuesday by the Social Security Administration.
Rubio's plan, which is co-sponsored by Sen. Mitt Romney, R-Utah, and known as the New Parents Act, gives parents who take Social Security payments for leave the option to delay retirement by between three to six months per child or to receive less in Social Security for the first five years of retirement. Some conservative critics oppose it on the grounds that it would place a further burden on Social Security, which is already on track to see its trust funds exhausted.
Actuaries from the Social Security office scored the idea to see what its effects on the program would be if it were to kick off in 2022. It found that the legislation would have a 'negligible effect' on Social Security's long-term finances.
The analysis does note, though, that after about 10 years, which Social Security's combined trust funds near exhaustion, new parents wouldn't be able to continue getting as much in funding after that time, as is also expected for those who are retiring.
Social Security's trust funds are expected to run out in 2034. If that happens, beneficiaries would face an immediate cut of about a fifth of their benefits. Should a paid parental leave be carried out through Social Security, those benefits would be cut as well. The change would happen even sooner in the case of a recession.
The study assumes that about 40 percent of parents who have a new birth or adoption would take leave and that they would choose to get benefits for an average of 2.5 months per child. The analysts also predicted that half of people would choose to delay retirement while another half would choose to receive less in Social Security. The cost of administering the plan is expected under the analysis to fall under normal Social Security administrative costs.
More Republicans are backing the idea of paid leave as President Trump has said it is a priority and as first daughter and White House adviser Ivanka Trump has encouraged such proposals. Reps. Ann Wagner, R-Mo., and Dan Crenshaw, R-Texas, have introduced a House version of the New Parents Act, and GOP Sens. Mike Lee of Utah and Joni Ernst of Iowa have similar legislation. A plan introduced earlier in the day Wednesday by Rep. Andy Biggs, R-Ariz., and 12 other lawmakers would let people tap into health savings accounts.