Cradle Act would allow parents to use Social Security benefits towards paid parental leave

FILE - Parental leave family newborn infant

Republican U.S. Sens. Joni Ernst of Iowa and Mike Lee of Utah introduced the Child Rearing and Development Leave Empowerment (CRADLE) Act that seeks to allow new parents to access their Social Security benefits to partially fund paid time off for maternity and paternity leave. Sen. Marco Rubio, R-Florida, introduced a similar measure, “Economic Security for New Parents Act,” last year.

The Cradle Act would give parents the option to choose between one and three months of paid time off from work for maternity or paternity leave by accessing some of their Social Security benefits early. In exchange, they would agree to postpone collecting their retirement benefits for the amount of double the time they took off for their leave.

Sen. Mike Lee said the “common sense” paid parental leave proposal is “a pathway forward for parents to have the option to stay home with their newborns during the critical first months after birth, without adding to our ever-growing deficit.”

In an op-ed for the Washington Post, the senators explained their proposal, which “would allow both natural and adoptive parents to receive one, two or three months of paid leave benefits. A few decades down the road, those parents would then ‘pay’ for the benefit themselves by delaying their own retirement for two, four or six months.”

Expecting parents would notify the Social Security Administration of their plan to take paid leave before the birth or adoption of their child. After they apply for their child’s Social Security number, payments would begin in two weeks, according to the plan.

The measure requires no new tax revenue. It is only available to new parents and does not affect new parents who choose not to participate.

Proponents argue the bill reforms the existing Social Security entitlement program by allowing recipients to have greater flexibility and control over how to access their own benefits.

But opponents, like Steve Benen at MSNBC, say the bill really isn’t a good plan.

I would have to agree with left leaning Steve Benen of MSNBC. Everyone has the opportunity to plan for child birth…. it is not like it happens immediately. Parents have up to nine months to store funding but no… we have to create that safety net for those that don’t plan.

“If enacted, the proposal empowers Younger You to spend time with your family’s new addition by getting money from Older You,” Benen said.

San Francisco-based financial planner Sean A. Fletcher told CNBC, “Regardless of whether Congress could devise a cost-neutral solution, it seems an unfair choice to present to young parents, and something of a gamble.”

“If the Social Security Trust becomes defunct, they’ll regret not taking the paid leave. Conversely, if they experience poor health before retirement, they may regret facing an inability to retire earlier,” Fletcher adds. “Most new parents already expect Social Security to begin at 70. For someone with a heart condition, six months could mean a lot.”

Rather than tap Social Security benefits, a recent Fortune-Morning Consult poll found that 74 percent of registered voters support the government requiring employers to offer paid leave for new parents. Seventy percent of male and 78 percent of female respondents said they supported a mandate. Among those identifying their political affiliation, 83 percent of Democrats and 71 percent of Republicans support the idea.

The U.S. is the only industrialized country in the world that does not require by law paid leave for new mothers. All states offer unpaid leave through the 1993 Family and Medical Leave Act, allowing new parents to take up to 12 weeks of unpaid leave without fear of losing their jobs.

Only 12 percent of private sector workers have access to paid leave through their employers, according to the Department of Labor.

New York, California, New Jersey, and Rhode Island have all implemented some form of parental leave laws. The city of San Francisco recently passed an ordinance requiring employers to give workers six weeks of fully paid parental leave.

The Social Security system is currently running a deficit. If Congress takes no action, the Social Security trust fund will be depleted by 2034, according to the National Committee to Preserve Social Security and Medicare. Because the system will continue to receive revenue from workers’ ongoing payroll contributions, it still would be able to pay 79 percent of benefits, according to the committee.

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