While Jared Kushner is promoting the Koch agenda for Willie-Horton-style jailbreak bills, his wife and co-president, Ivanka, is successfully getting one Republican after another to promote a new massive entitlement for paid family leave. As if we don’t have enough market interventions, government programs, and debt.
Here’s a novel idea: how about we eliminate all of the current government policies that force many families to have both parents working full time even while the kids are young? How about we undo the policies that drive down wages and drive up the cost of health care, food, fuel, and other vital services and then let’s see how family finances look? How about we decrease the debt, which is about the take a bite out of wage growth?
We would be better off as a country if we at least had a Republican Party that was merely at peace with every iota of the 100-year buildup of the federal leviathan without growing it. Yet, every time Republicans assume power and promise to reverse course, they not only codify the policies of the Left, they seek to grow them and venture into new areas of the economy and private life. This is what Margaret Thatcher often referred to as “the ratchet effect” to explain the one directional progress of liberalism when the Left is in power and the inability to reverse one iota of that momentum when so-called conservatives are in power. The ratchet only turns in one direction.
Adding a new entitlement while exacerbating the decline of another
However, Republicans always have clever nuances to sell Democrat ideas as conservative. Yesterday, Sen. Marco Rubio, R-Fla. introduced a bill (S. 3345), with Progressive Ivanka at his side, to create a new federal entitlement to paid family leave. They are promising to pay for it by raiding another program that is slated to go bankrupt – Social Security. They tell us that rather than creating a new funding stream, those seeking paid family leave will have the option of drawing upon their future Social Security benefits and forfeiting when they retire the amount they prematurely tapped in their early years. A summary of the bill says parents taking 8 weeks of paid leave at over 70 percent of their wages would, in turn, delay their Social Security collection by 3-6 months. Rep. Ann Wagner, R-M.O. promised to introduce a House version of the bill in September after they bankrupt us with the budget and the farm bill.
Isn’t this idea so clever and innovative? Raise your hand if you believe for a second that once we allow a new entitlement to pop out of the genie’s bottle it somehow won’t become its own fiscal mandate minus the funding from Social Security. Also, raise your hand if you believe we have the guts to deny these people their Social Security once this generation of young parents drawing upon the perspective family leave program reaches retirement. Finally, raise your hand if you think that once we revolutionize the idea of tapping early Social Security for the purpose of family leave that somehow it won’t become the new piggy bank for funding college, cars, and mortgages. That’s next.
This is a classic case of “I’ll gladly pay you Tuesday for a hamburger today,” from the taxpayer perspective. Or more aptly put from the entitlement perspective, “I’ll gladly give you a free hamburger today, and find a way to pay for it on Tuesday.” Who knows? Maybe Rubio will resurrect his idea of plugging the gap in Social Security he will inevitably exacerbate with this proposal by importing more extremely talented and affluent illegal aliens.
Anyone who hasn’t had their head under a rock for the past few decades understands that the Social Security Trust Fund – both the old age and disability accounts – is a Ponzi scheme. There is no pot of money earmarked for Mrs. Smith taking family leave today ensconced in Al Gore’s infamous lockbox. There is already an over $13 trillion shortfall over the next 75 years and they are paying today’s seniors with the payroll taxes of today’s workers. Thus, the theory of taking your own money out of your own account (to the extent this program somehow wouldn’t grow legs and get its own appropriations) would have worked under the original promise of Social Security or if we would convert the entire program to private accounts. But under the existing structure it will merely bankrupt the current program earlier because today’s workers will now be drawing upon that existing limited pool of cash.
In this sense, the idea of pairing the new entitlement against Social Security is even worse than just merely creating paid leave in its own right because it will exacerbate the flaws of both while also using the misconception of a free funding source to stimulate new entitlement ideas across the economic spectrum.
Also, it’s important to remember that the social construct of the program is built off the premise of first working your career and then receiving benefits upon retirement. You could theoretically, under this proposal, have a young mother who only paid a few years into the system collect benefits and then remain a homemaker for the remainder of her career and never pay into the system. Again, granting access to the funds before paying into it is a shaky foundation if your goal is to sell the proposition as some sort of private flexible savings account rather than a welfare program.
Hurting women in the labor force rather than breaking down existing barriers
Furthermore, like every market intervention, often the market distortions to the private economy inherent in government programs are even worse than the budgetary cost. One can only imagine the cascading labor market effects of this free source incentivizing more time off. It will likely hurt women by surreptitiously discouraging employers from hiring or promoting women of childbearing age to managerial positions.
In fact, we need not imagine the effect. Most European countries have a paid family leave program. According to a 2013 analysis of the National Bureau of Economic Research, women in countries with paid leave were half as likely to be managers than in the U.S. because of these market distortions. Talk about a government-induced glass ceiling on women! Introducing this program to America will engender further government mandates on the labor market to “fix” the problems it creates with devaluing the utility of hiring women.
Indeed, this program is the embodiment of everything wrong with government and everything wrong to the GOP approach and response to progressive agitation.
If we had a conservative party in Washington, they’d be conducting an audit of everything a young couple has to purchase in order to function. Whether it be health care, cars, housing, food, or fuel, there is a government regulation and market distortion that forces them to pay thousands more a year on vital goods and services.
Health care alone is a killer and until we repeal Obamacare and the many other government distortions that handed the industry over to a cartel monopoly, nothing we do on the entitlement will bring enough relief to families. Also, it’s important to remember that because of the Family and Medical Leave Act (FMLA), companies with more than 50 employees are already required to hold open jobs for maternity leave for 12 weeks while maintaining health insurance benefits. With health care being a dumpster fire and the cost of insurance skyrocketing on employers, incentivizing workers to take even more time off while still being covered will further depress wages or disincentivize employers from hiring women who are likely to have children.
This is yet another reason why we need to fix this crony government tethering of health care to medical insurance and medical insurance to employment through the tax code before complaining about the cost of child-bearing. The $300 billion annual handout to the insurance cartel boxes out individuals from the insurance market – people who want to pursue their own dreams with flexible work schedules, particularly young mothers.
There’s also a ton more to do on the regulatory side. According to the Competitive Enterprise Institute, federal regulations cost families nearly $15,000 per year. Trump has done a good job preempting Obama’s impossible increase in Corporate Average Fuel Economy (café) standards on auto-makers from taking effect. But why doesn’t Marco Rubio propose a bill to repeal the existing standards? Creating such options would save young couples thousands of dollars on auto purchases.
How about busting the government-education cartel monopoly on higher education, which saddles young folks with debt? How about vitiating the government regulations on flexible labor arrangements that allow employers to offer more flexible work options to employees and easing occupational licensing laws that are particularly pernicious to stay-at-home moms looking to become entrepreneurs?
Ironically, it’s the policies and culture of Ivanka’s circle of influence that has both driven up the cost of living and discouraged stay-at-home-motherhood during the early years of childhood. The lack of childbearing is much more a result of cultural declines beginning with the decline in marriage rather than a financial problem. But the debt that is created, which depresses wages, from programs such as Ivankacare, certainly contributes to the problem.
Why do we always operate solely within the paradigm of the Left? They are doing a good enough job on their own promoting their values without the assistance of those who campaign on a competing agenda.
Daniel Horowitz is a senior editor of Conservative Review. Follow him on Twitter @RMConservative.