A few weeks back we wrote an article about how the US was one of the few nations that did not have a government backed Paid Family Leave plan. The Trump Administration moved to correct this for government workers with a Paid Family Leave plan that went into effect during his final months in office. The Biden Administration is looking to further this with The American Families Plan.
The American Families Plan looks to provide many family friendly benefits. Some key tenants of the plan are relief on childcare, education (free Pre-K and Two-Year College), health insurance cost and a paid family leave plan for workers.
Paid Family Leave Details
The White House Fact Sheet on The American Families Plan cite that providing Paid Family Leave will greatly benefit families and provide more equality for women and workers of color in the workplace. They gave the following eye-opening statistics about how the current lack of policy is affecting the US worker:
“Nearly one in four mothers return to work within two weeks of giving birth”
“Nearly four of five private sector workers have no access to paid leave”
“95 percent of the lowest wage workers, mostly women and workers of color, lack any access to paid family leave”
Plan Implementation
The plan will take 10 years to implement, with different benefits kicking in over that time horizon. Early phases of the plan will allow for paid bereavement leave (up to 3 days a year) while Paid Family Leave would be fully implemented by year 10.
Once fully onboarded (year 10), the plan will provide workers up to $4,000 a month in Paid Leave compensation for qualifying events (including bonding with a new child, care for a serious ill loved one, military deployment of a loved one, and other qualifying events). The plan is targeting 12 weeks of replacement compensation once fully implemented.
The White House explains that “It will also provide direct support to workers and families by creating a national comprehensive paid family and medical leave program that will bring the American system in line with competitor nations that offer paid leave programs. “
Plan Likelihood
The big hurdle is how to fund the $1.8 Trillion plan. The Biden Administration has said the funding for this would come heavily from the Top 1 Percent. This group would have many of the tax benefits gained in the 2017 Tax Cuts reversed. The wealthiest 1 percent would have their tax rates reversed back to 39.6% and many of the IRS loopholes that enable tax breaks for high earners would have greater regulation.
The plan would greatly benefit families and provide the greatest relief for middle- and lower-income families. The Biden Administration is signaling that this will be funded by the upper class. The GOP is expected to push back on certain tenants of the plan including the idea on how it would be funded (not wanting to reverse some of the GOP 2017 Tax Cuts).
Like many Americans, the GOP generally supports a Paid Family Leave policy of some sort. The Trump Administration got a program implemented for government workers and was thought to be heading down a path for a plan for all workers. That said, the two parties will continue to spar over what a Paid Family Leave program should look like and how it is funded.
The Government has been on a spending spree due to multiple COVID relief packages. This has many in Congress weary of new costly initiatives. Couple this with the fact that The American Families Plan is coming on the heels of Bidens jobs and infrastructure plan and it feels like The American Families Plan may be pushed to the side.
What’s Next for Paid Family Leave
This Washington Post article details some of the challenges ahead for The American Family Plan. Jim Manly told The Washington Post “I’m not sure anyone knows how this is going to play out,” said Jim Manley, who served as an aide to former Senate majority leader Harry M. Reid (D-Nev.). “Getting the infrastructure provisions done is going to be hard enough, because Republicans may not want to play ball. But getting the other domestic spending plans over the finish line is going to be a heck of a lot tougher.”
Next steps are for Democrats to determine how they want to present this plan. They could package some or all of this with the infrastructure plan that is currently being bandied about in Congress. Or they could package this as its own plan (as one package or in pieces) in hopes that infrastructure moves forward, and this can be dealt with separately.
Either way, it feels that momentum continues to build around a Paid Family Leave program for the US. Forward thinking private businesses have led the movement up until now. Seeing bi-partisan support of Paid Family Leave may push other companies to move on this as well, prior to being told to by the government.