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Marco Rubio's family leave plan doesn't guarantee people family leave

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Hillary Clinton, Bernie Sanders, and Martin O'Malley have all talked about increasing access to paid family leave, and all three Democratic campaigns have converged around Kirsten Gillibrand's FAMILY Act proposal. It would offer up to 12 weeks of paid leave financed through an increase in Social Security taxes.

Last week, Marco Rubio became the first Republican to address the issue, with a plan released to use tax credits to try to encourage more companies to offer leave.

The plan underscores Rubio's signature approach to economic policy issues, which combines an embrace of new ideas with a determination to hew to orthodox conservative red lines, with the apparent contradiction between the two resolved by taking a cavalier attitude toward the budget deficit. Rubio's plan neither raises any new taxes nor burdens businesses with any new regulations. In that sense, it's Rubio, not Jeb Bush, who is the true successor to George W. Bush's political approach — and, to an extent, Ronald Reagan's.

How Marco Rubio's plan works

The Rubio plan for family leave is fairly simple:

  • Any employer that offers between four and 12 weeks of paid family leave can receive a tax credit defraying 25 percent of the cost, up to $4,000 per employee per year.
  • Leave would be available for new parents, but also to caretakers for sick family members.
  • The tax credit is not "refundable," meaning a business cannot reduce its tax liability below $0 by claiming these credits.

Rubio contrasts these ideas with the "outdated, costly federal mandates coupled with new tax increases" favored by Democrats. A mandatory system, Rubio argues, will "make it harder for women to enter the workforce, while creating an expensive new entitlement," whereas his plan "will support workers — not hold them back."

How Rubio's plan differs from Democrats'

There are, broadly speaking, two big differences between Rubio's approach and the approach Democrats are embracing:

  1. Democratic proposals would be a hassle for businesses, imposing transition costs and management headaches as firms need to switch to a new system.
  2. Rubio's proposal would perpetuate the situation in which the majority of American workers do not enjoy access to generous family leave policies.

Secondarily, they differ in the fact that if Rubio's plan turns out to be widely used (which it very well might not be), then it would lead to a substantial increase in the federal budget deficit. The FAMILY Act's costs are paid for through a tax increase, while Rubio has not specified any offsets for the cost of his tax credits.

Democrats are proposing a big change; Rubio isn't

The good and the bad of Democratic proposals on family leave is that they are offering a big change. The United States would stop being a country where there is no guaranteed family leave and one in four new moms are back at work within two weeks of giving birth.


This change would have upsides for parents and children, but also downsides for businesses. Even if there were no direct financial cost to FAMILY Act leave plans, companies would face the inconvenience of increased levels of worker absence and more need to find replacements or otherwise work around schedule disruptions. And, of course, people — including people who never end up using family leave — would need to pay higher taxes.

Rubio's plan has none of those downsides. Companies that currently offer leave would get a tax break. Those that don't currently offer paid leave would be free to continue not offering paid leave, with no need to disrupt their existing practices. Nobody's taxes would go up.

The flip side is that a modest tax credit is unlikely to change many companies' behavior. Some places would probably launch new leave policies, and some companies with existing leave policies might make them more generous, but Rubio's intentionally non-disruptive program will probably not lead many companies to change things up one way or another.

Marco Rubio doesn't care about the budget deficit

Earlier this year, Rubio announced a tax proposal that includes a bunch of provisions promoted by conservative "reformers" to boost the after-tax incomes of working- and middle-class families. He then tried to make the plan acceptable to the orthodox conservative focus on cutting taxes for the rich.

The result is a tax plan that is enormously expensive, and could only be paid for by enormous unpopular cuts in domestic spending that Rubio has not proposed. The family leave plan is smaller in scale but similar in spirit — it helps advance a liberal-ish goal but does so in a conservative-friendly way by structuring it as a business tax cut, and then addresses the cost issue by not addressing the cost issue.

This is essentially how George W. Bush governed the country. Following Dick Cheney's mantra that "Reagan proved deficits don't matter," he cut taxes sharply, even while waging two expensive military campaigns abroad. Rather than paying for this with controversial cuts to domestic spending, he added a new prescription drug entitlement to Medicare. When he wanted to push controversial reforms of K-12 education in the No Child Left Behind Act, he greased the skids by spending a bunch of new money on it. Democrats complained about Bush's refusal to choose between guns, butter, and tax cuts. But the things critics saw as likely downsides of large budget deficits — like high interest rates or a currency crisis — never happened.

When Barack Obama took office and began preaching the gospel of Keynesian stimulus, Republicans had a sudden conversion to the merits of austerity. That's been useful as a rhetorical trope to beat back Democratic policy ideas at a time when Democrats held the initiative. But combining austerity with a blanket refusal to raise taxes for any purpose tends to put Republicans in a straightjacket in terms of proposing any new ideas. As Rubio's plan shows, casting off the shackles of austerity makes it dramatically easier to address demand for action on various fronts without offending core tenets of conservative ideology.

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