Rubio's Bill to Modernize Social Security

|
|
Posted: Aug 06, 2018 9:15 AM
Rubio's Bill to Modernize Social Security

Sens. Marco Rubio (R-FL) and Rep. Ann Wagner (R-MO) are introducing legislation that will allow new parents to use their Social Security benefits for parental leave in exchange for delaying their retirement by three to six months. The Economic Security for New Parents Act, the lawmakers hope, will especially help middle and working class Americans deal with the "income shock" of having a child. 

Just over one in 10 workers receives paid family leave from their employers, Rubio and Wager point out. Why not let parents dip into Social Security during one of the most "vulnerable" times in their lives? Previous paid leave proposals have fallen short, they argue.

We need a national policy to increase access to paid parental leave for new parents. Previous proposals, emulating the approach of some European countries, have tried to accomplish this by increasing taxes or mandates on businesses. Those options would cut the pay and employment of the very people we want to help, and make families of all shapes and sizes subsidize one parenting model over all others.

The Independent Women's Forum is on board, noting that many workers need financial support well before they reach their 60s. It would also help to reduce a reliance on welfare.

Since many workers lack paid-leave benefits on the job, and have little savings accrued when having a child, this would help many who face a significant financial stress at a very important and vulnerable time. An estimated 17 percent of all workers (and half of low-income workers) who lack paid leave end up going on public assistance when they take time off from work. Giving them access to early Social Security benefits (which they would then effectively pay back by trading one benefit for another) would reduce dependency on other government programs.

"This is a modest and targeted reform that would help people who really need it, and make our entitlement programs more modern and flexible, rather than bigger," according to IWF.

Other groups aren't so sure. The Urban Institute, for instance, is convinced that allowing parents to prematurely use some Social Security benefits could have a negative domino effect on other programs. Sure, it will in the short term "provide meaningful leave benefits to participants," but the long term effects may not be worth it.

“By setting a precedent of allowing beneficiaries to borrow against their future Social Security benefits to finance nonretirement needs, however, the paid leave program could lead to other similar programs, such as ones to finance student loan forgiveness or midcareer educational investments, which could undermine Social Security’s ability to ensure basic retirement security for all Americans,” the group warned in April.

Rep. Wagner will be introducing the House equivalent to Rubio's bill in September.