The senators’ draft legislation, known as the Cradle Act, would allow new parents to receive up to three months of paid-leave benefits after the birth or adoption of a child, in exchange for delaying collecting Social Security benefits when they retire.
“I believe the Cradle Act is a policy that not only attracts consensus, but is viable for families, employers and our economy,” Ernst said during a press conference.
Under the proposal, new parents would have the option to take one, two or three months of paid leave benefits. They would then postpone collection of their Social Security retirement benefits by two months for every one month of parental leave they take.
The benefit amount would be based on the formula used for calculating Social Security disability benefits. A fact sheet from the senators’ offices said that a single parent with income equal to the federal poverty level would receive a benefit equal to about 74 percent of their wages.
Lee said the goal is for the draft legislation to be budget neutral in the long run, but at the front-end there would be costs of about $8 billion to $9 billion annually. He said that he and Ernst are looking at ways to offset those short-term costs.
The proposal comes as both Republicans and Democrats have put more focus on pushing for paid family leave ahead of the 2020 presidential election, when women will be a key group of voters.
Ivanka Trump, the president’s daughter and adviser, has made paid leave one of her top priorities and met with Ernst, Lee and other GOP senators to discuss the topic last month. She said in a statement Tuesday that she looks forward to reviewing the proposal from Ernst and Lee.
“I will continue to work with members on both sides of the aisle in support of the President’s goal of passing into law Paid Family Leave policy that supports 21st Century American working families,” she said.
But Democrats have criticized the idea of a paid leave benefit that takes the form of early Social Security benefits, saying that people shouldn’t have to choose between paid leave and retirement benefits. They have also criticized proposals that focus just on paid parental leave, rather than both family and medical leave.
Sen. Kirsten Gillibrand (D-N.Y.), who has offered her own paid leave bill that takes a different approach, said in a statement Tuesday that Ernst and Lee’s proposal is “not a realistic plan.”
“It only covers new parents and it creates a false choice between Social Security and paid leave,” she said. “We urgently need a national paid leave program that covers all workers for all medical emergencies, and anything less is just not enough.”
Gillibrand, who has entered the 2020 presidential race, has offered legislation that would create a paid family and medical leave benefit that would be paid for through a small increase in payroll taxes. Republicans, however, have been critical of the tax increases associated with that bill.
Lee stressed that the paid parental leave benefit in his proposal is optional, and he said that those who are eligible for the benefit are likely to want to take it because they consider it valuable to spend time with their newborn. He also said that new parents have been paying into the Social Security system and will be paying into it for decades to come after their children are born.
“It’s a tradeoff, but it’s a tradeoff that I think many will take,” he said.
Lee said that he and Ernst have discussed their proposal with a number of their Democratic colleagues, and several are considering supporting it. He declined to name the Democratic senators who might back his plan.