It’s often pointed out that Americans are the only people in the developed world who don’t have access to guaranteed paid leave from their jobs to care for themselves and their families.
But that’s not exactly right: while we don’t have a nationwide paid family leave program, lots of people in America do have access to paid family leave. According to the National Partnership, California, New Jersey, Rhode Island, and New York have statewide plans covering many private sector employees, and many cities and counties extend paid leave benefits to their own employees.
The success of those programs raises the obvious question: why don’t we have a nationwide paid leave program?
Marco Rubio has a commonsense solution to make your retirement more precarious
That brings me to Marco Rubio’s “Economic Security for New Parents Act,” which, to be clear, does not provide economic security for new parents. Instead, it allows new parents to claim a cash benefit after giving birth, and then permanently reduces their Social Security old age benefit in retirement.
It took me quite a bit of searching to find the actual text of the bill, so I’ll save you the trouble and link to it here.
To understand how the bill works, you need to keep three numbers in mind:
- everyone is eligible for “early retirement” benefits at age 62;
- people are eligible for “retirement” at an age determined by their year of birth (67 for most people living today, slightly earlier for some Boomers);
- and “delayed retirement credits” if they delay claiming benefits past their “retirement” age.
If you begin to claim old age benefits between your “early retirement” and your “retirement” age, your primary insurance amount is reduced (by 6.67% per year for the first 36 months and 5% per year after that).
If you claim old age benefits at your retirement age, you get your primary insurance amount.
And if you delay claiming old age benefits past your retirement age, your primary insurance amount increases by 8% percent per year.
This bill would destroy millions of lives
Once you know how Social Security old age benefits work, you can see why Rubio’s bill is so devastating:
- people who take parental leave have their early retirement age deferred: “the early retirement age with respect to such individual shall be deemed to be the early retirement age determined with respect to such individual plus the parental leave benefit adjustment with respect to such individual.”
- people who take parental leave have their full retirement age deferred: “the retirement age with respect to such individual shall be deemed to be the retirement age determined with respect to such individual plus the parental leave benefit adjustment with respect to such individual.”
- people who take parental leave will lose deferred retirement credits: “the Social Security Act is amended by inserting after ‘age 70’ each place it appears the following: ‘(or, in the case of an individual described, age 70 plus the parental leave benefit adjustment).’
While these penalties sound similar, it’s important to differentiate them. Between 42% and 48% of workers start claiming their old age benefit at age 62. For these workers, the changes to Social Security would mean for every child they have, they’re forced to delay claiming their already-reduced old age benefit.
Workers who claim their old age benefit at their full retirement age will also be penalized: a millennial eligible to claim their full benefit at age 67 who made the mistake of spending time with their child will instead receive 1-2% less per year, per child, permanently.
And a worker who wants to wait to claim their old age benefit until they’ve maximized their deferred retirement credits will have to wait, not until age 70, but months or years after that depending on the number of children they have.
Social Security is a guarantee of income during old age and disability
Social Security is not a savings account. It’s not a trust fund. It’s not an investment. You cannot “draw” on it, you cannot “make contributions” to it, and needless to say you cannot “fund YOUR paid leave with a portion of YOUR social security benefits which YOU paid for with YOUR taxes.”
That is not, and has never been, and never will be how the Social Security Administration works. You cannot “borrow against” your future Social Security benefits. You cannot “withdraw” your Social Security benefits. You cannot “invest” your Social Security benefits.
Social Security is a guarantee of income during old age and disability. You can sabotage it if you want to — that’s the nature of politics, there will always be people trying to sabotage the income security of the old, the sick, and the poor.
But if you sabotage Social Security, the outcome will be lower incomes, for more people, during old age and disability. There’s no hack, or workaround, or trick to keep Social Security benefit cuts from making the oldest, sickest, and poorest people in our society worse off.
And shame on Marco Rubio for trying.