Donald Trump is about to be the first Republican nominee to say that women should be guaranteed six weeks of paid maternity leave after they give birth, Sopan Deb of CBS reported this morning:
Donald Trump’s plan to fund a paid family leave program is totally absurd
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The problem, as Deb goes on to report, is that Trump seems to have no clue how he’ll pay for it.
There’s about $3 billion in unemployment fraud in the US every year. Even if Trump could root it all out, it would probably take at least three times that much money to afford a bare-bones paid family leave program.
Family leave is a big deal, and it costs a lot
There are two ways to guarantee family leave for everyone. The government can require businesses to pay their workers when they’re on leave. Or the government can pay the workers itself, as with Social Security or unemployment benefits. There’s also a weaker third option, encouraging but not guaranteeing family leave by creating tax credits for companies that offer it.
Since everything we know so far about Trump’s plan fits into two tweets, it’s hard to say for sure what he’s envisioning. But 88 percent of workers right now aren’t covered by family leave, so requiring businesses to pay for it on their own would be a very big burden. And if leave is really “guaranteed,” it’s going to require something more than a tax credit to make that happen.
As always, the big question is how to pay for such a major new initiative. Trump has said he’d cover the cost by rooting out unemployment insurance fraud. So the first question is how much Trump’s plan would cost — and the second is whether there’s enough fraud to pay for it.
Hillary Clinton’s plan to offer 12 weeks of leave at two-thirds of a worker’s previous salary would cost $300 billion over 10 years. Even assuming Trump’s is much less generous, offering six weeks instead of 12 and a smaller fraction of salary, there isn’t enough unemployment fraud in the United States to come close to paying for it.
A study published in 2013 by the St. Louis Federal Reserve found that unemployment fraud in 2011 totaled $3.3 billion, about 3 percent of total unemployment benefits paid out that year.
$3.3 billion is a lot of money. But given how much the government spends on unemployment, it’s not an astronomically high fraud rate: Worldwide, businesses lose about 5 percent of revenues to fraud. Even if Trump managed to drastically reduce unemployment insurance fraud, something he’s never mentioned a specific plan to do, he’d save a couple of billion at the most. Guaranteeing family leave would cost multiple times that.
Clinton has also called for paid family leave. Her plan would provide 12 weeks of paid leave, with workers earning two-thirds of their salary while they’re gone. The Committee for a Responsible Federal Budget estimates this program would cost $300 billion over 10 years — about $30 billion per year. To pay for it, Clinton has proposed higher taxes on the wealthy.
“Raise taxes on the wealthy” is Clinton’s plan to pay for nearly all of her proposed social programs, and it’s almost certainly politically infeasible. Even some progressives have suggested that raising taxes on the wealthy is the wrong approach to paying for family leave, and prefer a payroll tax instead, making the program broad-based like Social Security.
On the other hand, Clinton’s pay-for plan might be a political fantasy, but at least it would, in theory, pay for her proposal.
Trump’s plan shows his daughter’s influence — and his disinterest in policy details
It’s both historic and ironic that Trump is proposing this plan at all. Paid family leave hasn’t been on Republicans’ agenda in the past: When Marco Rubio proposed a tax subsidy in February to encourage employers to offer paid leave to their workers, it was touted as the first plan of its kind for any Republican presidential candidate.
And nobody would have thought Donald Trump — who once told a lawyer she was “disgusting” when she had to leave a deposition to pump breast milk — would end up being the first Republican nominee to champion child care and maternity leave in a national campaign.
But Trump has one very influential adviser on these matters: his daughter Ivanka, whose brand is all about “women who work.” The problem is that a branding campaign isn’t always a great platform on which to build national policy: Trump’s child care plan would benefit the wealthy, not the working poor who struggle the most. His paid leave plan appears to have even bigger problems.
And as with child care, Trump either doesn’t know or doesn’t care that there are conservative plans for family leave already on offer. Rubio’s plan wouldn’t have created guaranteed family leave — not all businesses would accept the tax subsidy or pass the benefits on to workers — but it at least acknowledged the issue in a way that fits with conservative orthodoxy.
Instead, Trump embraced a Democratic priority without even a fig leaf of concern for the deficit. Trump voters might believe the government is wasting billions of dollars and that a businessman can stop it. But the truth is the numbers don’t add up.
