Biden Thread

[Montmorency]

Contemporary McCarthyism

The upcoming votes on the two proposed infrastructure bills will determine who has power, and who doesn't. And I don't mean Republican vs Democrat....

I don't like to take time reading much about bills that haven't become law, but to the extent one does it's truly shocking just how many elements - in genuine compromise legislation that costs a fraction of the pandemic stimulus bills enacted so far, 6% of federal spending over a decade - have been sacrificed for the sake of conservative lawmakers who quite likely won't even vote for the final product. Even though it will hurt their country and their party. And in the context of normal politics, this is the last chance Democrats would have at unified government for the next decade at least; at least offer us some brief consolation before, in the context of real politics, the Republicans overthrow the government and we have to hit the streets. I didn't expect any better with such a slim majority, but the proximate agents staking out the insufficiency sure are a disgrace.

When a couple brings a new life into Sweden, they are entitled to 71 weeks of leave, during which time they receive 78 percent of their normal earnings. In the United Kingdom, couples may take up to 41 weeks of combined paid parental leave. Just across our northern border, Canadians may take up to 50 weeks.

America is the only developed country whose citizens are entitled to none. And we aren’t just an outlier within the OECD. A 2014 United Nations report found that, among the 185 countries with relevant data, only three declined to guarantee some form of paid maternity leave to their citizens: Oman, Papua New Guinea, and the United States. Only the latter two nations are still holding out today.

For years, the Democratic Party’s signature paid-leave legislation was Senator Kirsten Gilibrand’s FAMILY Act. That bill would guarantee 12 weeks of publicly financed paid leave, at a minimum of two-thirds of one’s previous wages (up to a limit of $4,000 a month), to workers who are:

• caring for newborn children or seriously ill family members
• battling a serious illness
• coping with the adverse consequences of a loved one’s military deployment
• mourning a lost loved one
• or recovering from an incident of domestic violence or a sexual assault

The bill finances those benefits through a 0.4 percent payroll tax, split between firms and their employees. This is the same funding structure used by Social Security and all state-level paid-leave programs.

Gee, sounds inadequate!

But the Family Act is not the version of paid leave that’s most likely to make it into law. Last week, the House Ways and Means Committee approved a similar but distinct paid-leave proposal. The new legislation, authored by the committee’s chairman, Richard Neal, retains the bulk of the Family Act’s basic design: It guarantees paid leave for the same list of reasons, at roughly the same rate of reimbursement, for the same length of time.

But there are a few critical differences between the two plans. One is that Neal’s proposal lacks a minimum benefit. In order to ensure that part-time workers with low-earnings secure non-negligible leave payments, the FAMILY Act guaranteed all eligible workers at least $580 a month in cash aid, even if they would be entitled to less money under the bill’s wage-replacement formula. The two bills also have different financing mechanisms. Whereas the FAMILY Act is funded through a dedicated payroll tax, Neal’s legislation is paid for out of general tax revenue.

The most significant difference, though, concerns each bill’s mode of administration. The FAMILY Act has the same model as Social Security — a unified federal program. Neal’s bill has a much more complex operating structure. In brief, the proposal subsidizes employer-provided paid-leave insurance plans and state paid-leave programs while reserving direct federal benefits as a backup for Americans who lack access to a state or employer plan. In other words, the legislation is modeled less on Social Security than on the tangled web of public-private and federal-state partnerships that the U.S. health-care system comprises.

This policy design poses some serious administrative hazards. As Matt Bruenig of the People’s Policy project argues:

By including private insurance in this way, the bill ensures that we will waste some of our paid leave money on private insurer overhead and profits. It also invites employers and insurers to profit off of benefit denials and cream-skimming of various sorts. An employer who has a workforce that takes a below-average amount of paid leave could conceivably get an insurance contract that charges less than the grant the Treasury pays them and then pocket the difference.

The employer and state plans will also massively complicate the system for individuals trying to take paid leave. Individuals seeking leave have to figure out firstly whether they are covered by an employer plan, secondly whether they are covered by a state plan, and then, if not, apply to the federal government for benefits and, in that process, prove they aren’t covered by an employer or state. What happens to someone who was covered by an employer plan at the beginning of the year but was later fired and is now seeking paid leave? According to the bill text, their name will show up in the Treasury database as being covered by their prior employer even though they no longer are.
Neal’s plan also suffers from shortcomings common to all of the Democrats’ recent paid-leave proposals. The 12-week duration of its individual benefits trails the OECD average of 18 weeks. Further, the duration rules are structured in a manner that disadvantages single parents relative to co-parenting couples. The latter can stagger their respective 12-week leaves, thereby avoiding child-care expenses for a full six months. Single parents are not, generally, more capable of incurring the costs of child care than two-earner couples are. Nor are the children of single parents generally in less need of parental nurturing during their infanthood. A more equitable policy design — common to paid-leave programs in many other countries — would provide all parental units with the same amount of paid time off and allow couples to divide the time between each other as they see fit, while enabling single parents to take the same amount of total leave as couples do.

Separately, the paid leave policy’s eligibility requirements likely render upwards of 30 percent of all new parents ineligible for cash support during their newborns’ first months. This is because parents must show labor-market earnings in the months before their desired leave. This excludes parents who have children while attending high-school or college, those suffering long-term unemployment, and the disabled, among others. If the point of paid leave is to allow parents to bond and nurture their newborn children, it is not obvious why unemployed parents should not be provided with at least a modest 12-week subsidy following their infants’ birth.

Neal’s paid leave proposal has made it out of committee. But now, like virtually every other item on the Democratic agenda — from green investment to universal prekindergarten to child allowances — the fate of a national paid-leave program rests on the success or failure of a single megabill.

Never let way less than the bare minimum be the enemy of Jack Shit.