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In Rubio’s Plan, Your Estate Must Repay Your Parental Leave Benefits If You Die Early
Watch out orphan children — SSA may soon be coming for your inheritance.
Late last month, Marco Rubio released what he described as a “pro-family framework following the Dobbs decision.” The actual content of the framework is recycled policies Rubio put out many years ago, but they perhaps deserve a second look, especially in light of Rubio’s new framing of them as pro-life benefits.
The Rubio framework has two main welfare benefits in it, the Child Tax Credit (CTC) and a parental leave program, which I will discuss in order below.
Child Tax Credit
Unlike the proposed Biden CTC or the child benefit proposed by Members Tlaib and Jones, the Rubio CTC is specifically designed to exclude poor families from the full CTC benefit and to ensure that the poorest families receive nothing at all from the program.
Rubio accomplishes this by making his CTC phase in based on family income, meaning that the more money you earn, the more CTC benefits you receive, up to a certain point. Because of this phase-in, new parents earning less than $29,412 per year are not eligible for the full $4,500 benefit and new parents with no earnings are eligible for absolutely nothing.
It is hard to understand how creating a child benefit that excludes the most desperate families is meant to be a “pro-life benefit” aimed at helping people who, post-Dobbs, are unable to receive abortion services. Abortion is most prevalent among young women with very low or no earnings, including many young women who are still in education. To these women, Rubio offers little to nothing. As is typical with supposedly pro-family Republicans, Rubio’s desire to crush the poor far exceeds any supposed interest he has in an “expansive” pro-life politics.
Rubio’s parental leave program provides 3 months of leave benefits for new parents with the catch that any parent that claims them will have to undergo a reduction in their Social Security old-age benefits to offset what they received for parental leave. Specifically, the Rubio bill states that a parental leave beneficiary will, at retirement, be required to choose between paying those benefits back by having their Social Security check docked for 60 months or paying those benefits back by having every Social Security check docked until they die.
Requiring parents to pay back their leave benefits through lower old-age pension payments is bizarre for a lot of reasons. The benefits in question would cost very little and could almost certainly be funded by increasing the payroll tax by 0.1 to 0.2 percentage points. Is Rubio really so afraid of such a tiny tax bump that he’d rather concoct a complicated clawback scheme that reduces parental retirement income in direct proportion to the number of children a person has?
In 2014, Rubio used to talk a lot about something he called the “parent tax penalty,” which he said justified the creation of family welfare benefits:
It would also take aim at another pernicious distortion—the parent tax penalty—that is more prevalent, if less understood, even by its victims.
Today, parents are, in effect, double charged for the federal senior entitlement programs. They of course pay payroll taxes, like everyone else. But unlike adults without children, they also shoulder the financial burden of raising the next generation of taxpayers, who will grow up to fund the Social Security and Medicare benefits of all future seniors.
The “parent tax penalty” framing of this is a bit goofy, but the underlying idea here is obviously correct. Old-age benefits like Social Security and Medicare are kept afloat by the creation of future generations of workers, i.e. by having and raising children. This means that everyone who uses those programs, including those that never have children, benefit from the costs parents undertake to raise children. It stands to reason, then, that at least some of the costs of raising children should be socialized by the creation of benefit programs, like parental leave, that we all pay into.
But now eight years later, Rubio is proposing a parental leave program that only parents pay into and in which parental payments are literally assessed as reductions in old-age benefits! The very same old-age benefits that parents make possible for everyone by having and raising children are the ones Rubio wants parents, but not non-parents, to forego in order to finance parental leave. He is literally proposing a “parent tax penalty” collected through the old-age benefit system!
The funding mechanism for Rubio’s parental leave program has gotten the most attention, but there are other aspects of it that are even more odious and obviously at odds with the “pro-life” branding he’s now attached to it. Most glaringly, Rubio’s parental leave program excludes from eligibility anyone who has worked for less than two years. Parents who are still in education or just joined the workforce, which also describes many people who have abortions, will get absolutely no money from this program.
Lastly, buried in the bill text is another curious detail that so far nobody has noticed. In order for Rubio’s proposal to truly be budget-neutral, he needs the Social Security Administration (SSA) to be able to recover all of the parental leave benefits it pays out. For people who live long enough to claim Social Security, this is easy enough: the SSA recovers the leave benefits by docking their Social Security checks.
But what about people who die before they retire? How do you get the money back from them? In Rubio’s bill, when someone dies before reaching old age, all of the parental benefits they received during their life are deemed overpayments and the SSA makes their estate pay them back. So when mom or dad tragically dies a few years after having their third kid, the surviving spouse will have to send a big fat check to the SSA.
To me, this seems cruel.