Lawmakers float tax credit advance as a paid leave compromise
HR Dive
WASHINGTON — U.S. Senators Bill Cassidy, R-La., and Kyrsten Sinema, D-Ariz., think their attempt to bring federally guaranteed, paid family leave to American workers differs just enough from previous proposals to succeed.
Under the Cassidy-Sinema plan, originally announced in July, parents who qualify for the federal Child Tax Credit would have the option of taking an advance of up to $5,000 upon the birth or adoption of a child. Only adoptions of children age six or less would qualify, and instead of the $2,000 tax credit they would normally receive, parents who decide to take the advance would receive an adjusted tax credit of $1,500 annually over the following 10 years.
Bipartisanship is a key selling point of the proposal, which will be formally introduced in the Senate this week, the senators said Wednesday at an event hosted by the American Enterprise Institute. “No one’s been able to come together,” Cassidy said. “I just thank [Sinema] for being able to come out of a comfort zone into a place where we can actually go forward, and not making the perfect the enemy of the good.”
The plan includes a provision for low-income families who do not qualify for the full, refundable portion of the Child Tax Credit; they would similarly be able to take an advance equivalent to 12 weeks of wage replacement at 100%. These families would then receive an adjusted Child Tax Credit over the following 15 years.
An audience member asked whether the proposal would provide job protection to workers who don’t otherwise have access to job-protected leave under the Family and Medical Leave Act (FMLA). The bill seemingly does not; Sinema said those workers “would most likely use it as payment of childcare so that they can go back to work and preserve their job status.”
Despite interest in paid leave from stakeholders — ranging from members of the Trump administration to business groups to both Democrats and Republicans — previous paid-leave proposals at the federal level have fallen short. Past sticking points for those bills and proposals include whether they guarantee access to paid leave and/or flexible work arrangements, job protections and — perhaps most significantly — who pays for the proposal.
Past efforts vary in their approach to the latter point. The Senate’s FAMILY Act, proposed in 2017, would introduce a payroll tax. The Workflex in the 21st Century Act, backed by the Society for Human Resource Management, has employers footing the bill in return for protection from more generous state and local laws. A bill introduced in 2018 by Sen. Marco Rubio, R-Fla., would allow parents to receive an advance on a portion of their Social Security payments.
Sinema and Cassidy said that because their proposal doesn’t take away from Social Security, and doesn’t involve a payroll tax increase, it will appeal to lawmakers. “By utilizing the child tax credit and making it optional, families can choose to utilize the dollars to which they are entitled anyway, just using them sooner in their child’s lifetime,” Sinema said.
The proposal also preserves attachment to the workforce, according to Cassidy. “We know that if a worker decides to stay home to be with a child that she is more likely to go on public assistance, and the trajectory of her income remains lesser,” he said. “If she remains attached to the workforce, then the trajectory of her income is higher. And so we do think long-term, getting some form of income replacement will allow her to … remain attached.”
But the Cassidy-Sinema plan will still need to contend with previous proposals, particularly the FAMILY Act, which has support from several Democratic presidential candidates. Sinema answered a question about garnering support from her side of the aisle by saying in part that the presidential candidates “are not my prime target” and that the pair have made progress in talks with other senators. “I expect that you’ll be pleasantly surprised to see not just the number of folks who will join us but the breadth of their ideological opinions,” she said.