ThinkProgress

Trump’s updated paid leave plan ‘falls short’ in nearly every way, experts say

President Donald Trump and his daughter and adviser Ivanka Trump. CREDIT: AP Photo/Susan Walsh

During the presidential campaign, Donald Trump became the first Republican ever to offer up a new paid leave plan: six weeks of guaranteed paid maternity leave for birth mothers.

By excluding fathers and adoptive parents, though, the plan — crafted by his daughter Ivanka — risked creating a backlash against working women. So the Trump administration is now getting ready to release an updated version of the plan in his budget on Tuesday that expands benefits to all parents.

“For the first time ever, by any administration of any party, we are proposing a nationwide paid parental leave program,” budget director Mick Mulvaney told reporters on Monday.

Experts who have researched and worked on shaping paid family leave policy noted that this is a positive step. Vicki Shabo, vice president at the National Partnership for Women & Families, called it an “incremental” improvement over the campaign outline.

But few of them thought the expansion would be enough to make it a plan worth passing and implementing. Six weeks is barely enough time to recover from giving birth. Most people who need time off from work won’t be covered. Meanwhile, the plan’s reliance on the unemployment insurance system almost certainly dooms it to fail — meaning very few parents would even get paid leave anyway.

“I really have concerns about what kind of precedent this would set,” said Sarah Jane Glynn, a paid leave researcher who works with states on program design and administration. “Some people are tempted to view this as a first step, but it takes us a very long time to get to the next step. So if you set your sights too low or too small, you can sometimes end up shooting yourself in the foot.”

Shabo agreed. “This program is dangerously out of step with what people need,” she said. “This proposal itself could well do more harm than good.”

Flimsy benefits that exclude most people who need them

The first problem with the plan is that it still leaves out a huge share of people who need time away from work each year. According to the most recent survey of those taking unpaid Family and Medical Leave Act (FMLA) leave, about three-quarters of leaves were taken by those who cared for their own medical conditions or for sick family members; less than a quarter were to care for new children. But those people couldn’t take paid time off under Trump’s proposal.

Trump’s baby-only plan “fails to address the family and medical needs that [most] people who take leave each year need,” Shabo said.

And with an aging population, the need to take time off of work to care for an elderly parent will only grow. “You can’t just leave elderly caregiving out of the equation,” argued Heather Boushey, executive director and chief economist at the Washington Center for Equitable Growth. “That’s not the world we live in.”

It’s also out of sync with the FMLA insofar as it only guarantees six weeks; the FMLA set a baseline of 12 weeks off. Some places have even sought to go much further, such as a bill in Washington state that would offer 16 weeks. That duration lines up with the research on how long mothers need to be off of work before the benefits for their and their babies’ health kick in.

Six weeks, on the other hand, is the minimum recommended amount of time for someone with an uncomplicated vaginal delivery to recover. Any complications or a caesarean section will only add to that, and that doesn’t start to touch on what an infant that small might need. “It’s not an ideal scenario to have six-week-old babies in daycare,” Glynn said. Just finding a daycare that will take a six-week-old infant is very difficult and expensive.

“Six weeks is better than nothing,” Boushey conceded. But she noted that most states have gone further than that as they’ve gradually adopted programs.

The Trump administration has yet to release details on how much pay workers who take leave would receive. But unemployment insurance checks are quite skimpy: On average, benefits replace only about half of a person’s paycheck. That could create some big problems. Men, who tend to earn more than women, could be less likely to take leave if they’re getting so little of their normal paychecks.

“For a policy to be effective, it’s got to be economically meaningful,” Boushey said. That means that benefits have to be generous enough that they can actually help families cover their expenses while away from work. Otherwise, few can actually make use of it. “Fifty percent [of a workers’ normal wages] seems like the barebones minimum,” Boushey said. Instead, two-thirds of wages is “a good threshold to aim for.”

Crushing an already fragile system

This all assumes that every state would even be interested in participating in Trump’s plan. But it’s nearly a given that many wouldn’t or couldn’t.

To participate, states without functioning paid family leave programs — so all states except for California, New Jersey, Rhode Island, and soon New York — would have to set up something brand new. But it’s not likely that the federal government could legally compel all states to set up programs, particularly after the Supreme Court’s ruling over the Affordable Care Act’s Medicaid expansion threw cold water on the idea that the federal government can coerce states to expand programs.

“My guess is that not every state would end up doing it, in part because state unemployment insurance systems in many, many states are woefully inadequate already just to deal with [unemployment insurance],” Glynn said. “There’s no way we would end up with universal coverage.”

Trump’s plan purports to overlay the benefits on the existing unemployment insurance system. But that system is already in a very shaky state. Many states had failed to adequately fund their systems before the recession, and most have yet to recover from the financial hit they took during the downturn. Efforts to modernize them — some still rely completely on paper, while others use coding language from the 1970s — are still not completed. “Systems are so out-of-date in so many states… They are just really, really antiquated systems,” Glynn said.

“States can’t just add [paid leave] on as a new thing,” she added — at least not without a massive and expensive overhaul of what exists. Even states that might want to probably aren’t in a situation where they could. “They simply don’t have the infrastructure to allow this to happen right now.”

“Adding paid leave on top of this system in a voluntary way [means] many states aren’t going to do it,” Boushey said.

Even if states did participate, however, there would still be big problems with using unemployment insurance to do it. “You’d have to change all 50 state [unemployment insurance] programs,” Boushey said. “The incentives are totally different” than those for paid leave. The way that unemployment insurance is currently designed, employers are incentivized to have as few employees tap into benefits as possible; an employer’s tax rate goes up depending on how many employees have become eligible for unemployment. That way, companies are prodded to keep workers in their jobs.

“On literally every aspect of this, it falls short to me.”

“Obviously that would be completely inappropriate for a paid leave program,” Boushey said. “In this case, you want employers to allow a person to go on leave and come back to their job.”

And because states run their own unemployment insurance programs, things could vary drastically from place to place. “Eligibility looks different state by state, the tax rates, wage replacement levels,” Glynn said. Many don’t even cover most workers — on average, just 27 percent of unemployed people are eligible for benefits thanks to restrictions on work histories and hours, a drop from around 50 percent in the 1950s.

“There’s 50 unique systems that exist in partnership with our federal government,” Glynn said. That would mean someone living in one state wouldn’t necessarily get the same paid leave benefits of someone living in a neighboring one. “Fifty state programs is not an efficient, cost-effective way to make sure workers have access to this benefit.”

“It just isn’t a good way to proceed when you have a nation where there’s uniform, consistent need across states,” Shabo agreed.

It’s also unclear where the extra money would come from to fund the paid leave benefits. Trump’s budget says that the program will cost $25 billion over ten years. While the campaign proposal said it would get the money from reducing fraud in unemployment insurance, reports now indicate that states will be on the hook to cut spending or increase taxes to pay for it.

“It sounds like an unfunded mandate on states that could well result in cuts to other services,” Shabo said.

Trump’s idea of routing paid family leave through the unemployment insurance infrastructure isn’t even new. President Clinton proposed doing just that in his second term, an idea that came to be known as “baby UI.” His administration issued a regulation allowing states to expand their systems to allow parents to take leave for the arrival of a new baby if they chose to.

But while a number of states looked into it — 15 even introduced legislation — none ever actually ended up implementing it. And the conditions for doing it were far better back then. “The economy was really strong,” Glynn pointed out. The trust funds were flush with money.

The idea was eventually canned. Business groups brought a lawsuit saying that Clinton’s regulation violated federal law. While that suit was rejected on a technicality, once President George W. Bush took office he had his Labor Department — under Elaine Chao, now Trump’s transportation secretary — evaluate it. His lawyers found that it ran contrary to federal law because unemployment benefits require recipients to be available to work. Those on paid leave, on the other hand, are by definition unable to work while they’re away. “That was the death knell to the baby UI system,” Glynn said.

“Based on that track record, that seems potentially problematic,” she said. To move forward, the Trump administration would have to first overturn that ruling and instead find that such a program would be legally permissible or get Congress to pass legislation saying as much.

“On literally every aspect of this, it falls short to me,” Glynn said. “I wish people would aim higher…because we have some pretty well proven examples both domestically and internationally to show us that this is not a great idea and there are better options available.” Three states already serve as examples of how paid leave could be effectively administered — but none of them rely on unemployment insurance.

“There are a host of problems with this proposal that makes me feel quite certain that we need to keep fighting for, and using evidence to demonstrate the value of, something better,” Shabo said.