What others say: Yet another entitlement?

  • By The Wall Street Journal editorial
  • Monday, March 5, 2018 9:06am
  • Opinion

One in five Americans is on Medicaid, and Medicare and Social Security will require huge future tax increases. Yet some in the ostensible party of limited government think this is the perfect time to add a new entitlement for paid family leave. Who wrote that book about Republican Party suicide again?

Florida Senator Marco Rubio and his sidekick Mike Lee of Utah are teaming up with Ivanka Trump to design a plan for federal paid leave. President Trump has endorsed the concept, and his budget includes an outline involving unemployment insurance.

Kristin Shapiro and Andrew Biggs recently laid out a proposal on our pages to open up Social Security to finance family leave, and it is gaining some traction on the right. New parents could choose to draw on their retirement benefits for some length of time, perhaps 12 weeks, in exchange for delaying Social Security payments for a roughly comparable period.

ADVERTISEMENT
0 seconds of 0 secondsVolume 0%
Press shift question mark to access a list of keyboard shortcuts
00:00
00:00
00:00
 

The plan would supposedly pay for itself because workers would merely change the time in their lives when they collect Social Security benefits. No mandate on employers, no payroll tax increase. Presto, a free political lunch.

The first problem is that this would shift the burden of providing the benefit from the private economy to government. Academic evidence shows that family leave keeps employees in their jobs and can make them happier or more productive, which is one reason many companies pay for it. But why pay when the government offers 12 weeks?

Proponents say this won’t happen because the Social Security payout will only furnish about 45 percent of the average worker’s wages, but that still changes business incentives. Some companies might add more money or more weeks, but they’ll stop paying for that 45 percent of the first 12. This “crowd out” effect is a hallmark of all entitlements — such as Medicaid’s displacement of private health insurance.

Republicans would be making an enormous mistake to interrupt decades of business progress toward more generous family policies. CVS, Lowe’s and Walmart are among the companies that have announced new or expanded paid leave benefits since the GOP’s tax reform lowered the cost of wealth creation. Why not let faster growth and tight labor markets create more incentive for private family leave?

Also strap yourselves in for the politics. Social Security started as a 2 percent payroll tax to support the elderly poor, but the tax is now 12.4 percent and the program is still severely under-funded. We look forward to Ivanka explaining that politicians raiding Social Security for a new benefit pose no financial risk to Florida retirees.

Social Security purports to allow a person to earn benefits over a career, but that work requirement will also be a casualty of this family-leave raid. No politician is going to deny leave to a pregnant 22-year-old merely because she hasn’t paid much into Social Security. Watch the social right demand a comparable cash benefit for stay-at-home moms, and also dads, or caring for an elderly dependent.

And wait until you meet the focus group known as Congressional Democrats, who are already dismissing the proposal as unfair for forcing women to choose between children and retirement. Democrats will quickly wipe out the deferral period so everyone is entitled to leave now and get the same retirement benefits later. And once Republicans open Social Security for family leave, the door will open for other social goals. Why not college tuition?

Some call these slippery-slope arguments, and they are, but every entitlement since Revolutionary War pensions has skied down this slope of inexorable expansion. Disability started as limited insurance but now sends checks to roughly nine million people. Medicaid was intended to cover the vulnerable and disabled but today dozens of states cover childless working-age adults above the poverty line. John Cogan’s new book, “The High Cost of Good Intentions,” explains all this, if conservatives care to learn from history.

The pressure to raise payroll taxes to finance Social Security and Medicare is already growing as more Baby Boomers retire. Complicate Social Security with new spending purposes, and the drive to raise the $128,400 income cap on the 12.4 percent payroll tax will be unstoppable. How do you like a 60 percent marginal tax rate?

Behind family-values platitudes is a question of whether government should pay for every benefit worth having in American life. Mr. Rubio and others think Republicans must compete with Democrats on government handouts, only less generous and targeted to people they like. With their latest budget deal, the GOP is staring at annual deficits of $1 trillion a year. Republicans should be reforming entitlements, not expanding them.

— The Wall Street Journal,

Feb. 27

More in Opinion

Gov. Mike Dunleavy (R-Alaska) speaks to reporters about his decision to veto an education funding bill at the Alaska State Capitol on Thursday, April 17, 2025. (Jasz Garrett / Juneau Empire file photo)
Opinion: The fight for Alaska’s future begins in the classroom

The fight I’ve been leading isn’t about politics — it’s about priorities.

Dick Maitland, a foley artist, works on the 46th season of “Sesame Street” at Kaufman Astoria Studios in New York, Dec. 15, 2025. (Ariana McLaughlin/The New York Times)
Opinion: Trump’s embarrassing immaturity Republicans won’t acknowledge

Sullivan should be embarrassed by the ignorance and immaturity the president is putting on display for the world to see.

Rep. Justin Ruffridge, R-Soldotna, speaks in support of debating an omnibus education bill in the Alaska House Chambers on Monday, Feb. 19, 2024 in Juneau, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Capitol Corner: Choosing our priorities wisely

Rep. Justin Ruffridge reports back from Juneau.

Sen. Jesse Bjorkman, R-Nikiski, speaks in support overriding Gov. Mike Dunleavy’s veto of House Bill 69 at the Alaska Capitol in Juneau, Alaska, on Tuesday, April 22, 2025. (Mark Sabbatini/Juneau Empire)
Capitol Corner: As session nears end, pace picks up in Juneau

Sen. Jesse Bjorkman reports back from Juneau.

Alaska Department of Education and Early Development Commissioner Deena Bishop and Gov. Mike Dunleavy discuss his veto of an education bill during a press conference March 15, 2024, at the Alaska State Capitol. (Mark Sabbatini/Juneau Empire file photo)
Opinion: Strong policy, proven results

Why policy and funding go hand in hand.

Former Gov. Frank Murkowski speaks on a range of subjects during an interview with the Juneau Empire in May 2019. (Michael Penn / Juneau Empire File)
Opinion: The Jones Act — crass protectionism, but for whom?

Alaska is dependent on the few U.S.-built ships carrying supplies from Washington state to Alaska.

Cook Inlet can be seen at low tide from North Kenai Beach on June 15, 2022, in Kenai, Alaska. (Photo by Erin Thompson/Peninsula Clarion)
Opinion: Solving the Cook Inlet gas crisis

While importing LNG is necessary in the short term, the Kenai Peninsula is in dire need of a stable long-term solution.

Sockeye salmon caught in a set gillnet are dragged up onto the beach at a test site for selective harvest setnet gear in Kenai, Alaska, on Tuesday, July 25, 2023. (Jake Dye/Peninsula Clarion)
Capitol Corner: Creating opportunities with better fishery management

Sen. Jesse Bjorkman reports back from Juneau.

The ranked choice outcome for Alaska’s U.S. Senate race is shown during an Alaska Public Media broadcast on Nov. 24, 2022. (Alaska Division of Elections)
Opinion: Alaska should keep ranked choice voting, but let’s make it easier

RCV has given Alaskans a better way to express their preferences.

The Alaska State Capitol on March 1. (Ashlyn O’Hara/Peninsula Clarion)
Opinion: Keep Alaska open for business

Our job as lawmakers is to ensure that laws passed at the ballot box work effectively on the ground.

Image provided by the Office of Mayor Peter Micciche.
Opinion: Taxes, adequate education funding and putting something back into your pocket

Kenai Peninsula Borough taxpayers simply can’t make a dent in the education funding deficit by themselves, nor should they be asked to do so.

Brooke Walters. (Courtesy photo)
Opinion: A student’s letter to the governor

Our education funding is falling short by exuberant amounts.