WASHINGTON — The partisan divide in Congress over paid family leave was in sharp focus at a House Ways and Means Committee hearing Wednesday where Democrats offered support for a tax-funded federal requirement while Republicans suggested tax incentives to encourage employers to provide such a benefit.
House Democrats, who now hold the majority, are considering legislation that would build on the Clinton-era Family and Medical Leave Act that now allows employees to take up to three months of unpaid leave for the birth of a child or to care for a sick family member without fear of losing their job. Legislation offered by Representative Rosa DeLauro would provide paid family leave through a new employer-employee tax. California already has a state version of the bill and Washington state is setting up a similar program, too.
Connecticut is debating a paid Family and Medical Leave bill that would require employees to contribute 0.5% of their paycheck to the fund. Workers would then be allowed to access a portion of their wages for up to 12 weeks of leave. Every business in Connecticut with as few as one employee would be required to participate, and solo business owners would also be allowed to opt into the system.
“Nearly all workers will need to take time away from work at some point to deal with serious personal health issues, to care for a family member, or to welcome a new child. But for middle-class workers, especially those on the lower end of the pay scale, taking unpaid leave makes it impossible to make ends meet,” Ways and Means Committee Chairman Richard Neal of Massachusetts said.
Neal noted that the Family and Medical Leave Act has been used more than 200 million times since it became law over 25 years ago without much complaint from businesses. But, he said, many families miss out because they can’t afford to take time off without pay. While Congress has not addressed the issue, Neal said states are doing so. Massachusetts will be the sixth when its program launches in 2021.
Representative Kenny Marchant of Texas said he supports paid family leave but prefers that Congress provide tax incentives to encourage employers to offer the benefit rather than establish a costly new federal program based on a payroll tax.
“Many businesses are leaving these utopian states and relocating in states than do not have that kind of taxation,” he said.
Rachel Greszler, a research fellow at the conservative Heritage Foundation, was a witness at the hearing. She argued against establishing a comprehensive federal program for paid leave saying the costs would fall heavily on low-income wage earners, and that a federal program would crowd out employer- and state-based family programs that are emerging.
She noted research that has found that two thirds of employees who take leave were paid by their employers through personal days, paid time off benefits or temporary disability insurance benefits.
To pay for DeLauro’s proposal, she said, it would require a payroll tax of between 0.4% and 2.9%, or between $120 and $870 more in taxes for someone making $30,000 a year.
Pronita Gupta of the Center for Law and Social Policy was a witness at the hearing. She pointed to studies that have found the majority of African-American, Latino and low-wage employees cannot afford to take unpaid leave.
“Relying on tax incentives or state strategies is not enough. It leaves huge gaps in access,” she said.
Gupta noted that there are cost benefits to paid family leave. A California study found the program has led to an 11% decline among the elderly in nursing home use.
Representative John Larson proudly noted that Connecticut was the first state to pass a family and medical leave law, singling out efforts by former Senator Chris Dodd and DeLauro, who was Dodd’s chief of staff when the law was considered. Larson was in the state Senate when Connecticut adopted its law.
Much of the impetus for the family leave law, he said, was in response Yale University Professor Edward Ziegler, whom he described as a champion for early childhood care.
As to the current debate, Larson cautioned against calls for “flexibility” saying that is often a code word for doing nothing. He also spoke out against an alternative plan Senate Republicans have offered that would allow individuals to tap into future Social Security benefits to pay for family leave.
“Talk about robbing Peter to pay Paul. Robbing from one generation to pay for another,” he scoffed.