- "Not only is it important for Americans to able to afford to start and expand families but having the time to nurture new life is likely to produce healthier children down the road." Tweet This
- "Most paid leave proposals are funded by employer mandates or taxes. Funding paid leave through Social Security creates a voluntary system that avoids these costs." Tweet This
Lawmakers on both sides of the aisle agree that some form of paid family leave is long overdue for American families. To that end, several paid leave proposals have been introduced in Congress by both Democrats and Republicans, and we hope to spotlight a number of these bills on the Family Studies blog in the coming months. One of these proposals is the “CRADLE Act” sponsored by Senators Mike Lee (R-Utah) and Joni Ernst (R-Iowa). IFS Senior Fellow W. Bradford Wilcox recently spoke with Senator Lee about this paid leave plan and other ways public policy can help reduce the cost of having and raising children. The following interview has been edited for clarity.
W. Bradford Wilcox: The United States appears to be heading to a record low fertility rate in 2019. Surprisingly, even Utah has seen dramatic declines in childbearing in the last few years. What do you think are the key factors driving fertility down in the nation as a whole and in Utah?
Senator Mike Lee: Interestingly, fertility had been slowly rising for years until the Great Recession, going up during good economic times and down in bad. The depth of the Great Recession partly accounts for the recent drop in fertility. But what’s different now is that fertility has continued to decline as the economy has improved. That might reflect the high costs of student loan repayment—many young adults took shelter from the recession by going to or staying in school. It might also reflect the high cost of housing.
There may be a more benign interpretation of the continued decline in fertility over the recovery. Since the bottom of the recession, birth rates among married women have increased. It is only among unmarried women that birth rates have continued to fall. If that reflects delayed childbearing—perhaps induced by the recession—we may find that what would have been a greater number of out-of-wedlock births among younger women, instead, became a somewhat lower number of births to older married women. We would have lower fertility but with more children born to married parents.
Wilcox: Today, many women do not have as many children as they would like to have. What can policymakers do to make family formation easier and more affordable for ordinary families?
Sen. Lee: This is an important policy goal of mine, and it will be a focus of my Social Capital Project within the Joint Economic Committee. One way to increase family affordability is through paid leave policies. I just announced my own paid leave bill with Senator Joni Ernst, the “CRADLE Act.” In the past, I have introduced and sponsored legislation to expand the Child Tax Credit. I like the Child Tax Credit over child care subsidies because it also helps families that prefer having a stay-at-home parent.
There are many other ways policy could help reduce the cost of raising a family. For instance, I have proposed legislation that would give people working overtime the opportunity to be paid in comp-time rather than through higher pay. Getting rid of needless licensing requirements for child care workers would also cut parents’ costs. Federal policy also inflates the costs of health care, higher education, and housing. Smarter regulatory and tax policy could remove some of these distortions and lower the cost of living.
“The CRADLE Act would allow parents to receive one, two, or three months of paid leave by giving them the option to postpone activating their Social Security benefits. The plan provides every new mom and dad the flexibility to stay home with their newborns during the critical first months after birth, without creating another massive mandated government program or adding to our ever-growing deficit”—Sen. Mike Lee's office.
Wilcox: Tell us more about the “CRADLE Act.” How does it work for ordinary families? Why do you think it would make an important contribution to American family life and the welfare of children?
Sen. Lee: Not only is it important that Americans be able to afford to start and expand families but having the time to nurture new life is likely to produce healthier, better-adjusted children down the road. The days and weeks following the birth of a child are crucial for infant health and the parent-child relationship, which affect development in childhood and adolescence.
The CRADLE Act would give parents the option to pay for up to three months of leave by delaying their receipt of Social Security benefits by up to six months. This benefit would be available to natural and adoptive parents with a recent history of work. It would be more generous the lower a parent’s income.
Wilcox: Why fund the “CRADLE Act” through Social Security? Parents, in particular, are contributing to the long-term viability of Social Security, both by paying their payroll taxes and by raising the next generation of taxpayers. In light of this, some would argue that it is not fair to delay payment of Social Security for parents who are already making sacrifices to raise the next generation. What do you say to these critics, and how would you pay for this plan?
Sen. Lee: We all want parents to be able to make the most of their newborns’ first months. The question has always been how to pay for parental leave. Most paid leave proposals are funded by employer mandates—which may reduce paychecks and jobs—or taxes (which may slow economic growth). Funding paid leave through Social Security creates a voluntary system that avoids these costs. The “CRADLE Act” is fiscally responsible in that parents fully repay the Social Security system through their delayed retirement. In the short-run, we propose transferring general revenue funds to the Social Security Trust Fund, but those costs would be recouped when today’s beneficiaries reach retirement age.
It is true that parents contribute to Social Security twice—once through their own payroll taxes, and again through the payroll taxes of the children they bring into the world. This is a problem I have called the “parent tax penalty.” But that is a separate issue that I have addressed by championing the expansion of the Child Tax Credit, which I continue to support.
Editor’s Note: The views expressed in this interview do not necessarily reflect the official policy or views of the Institute for Family Studies.