Republican Bill Cassidy and Democrat Kyrsten Sinema have a plan that would allow new parents to obtain an advance on their child tax credit.
Senators Bill Cassidy (R., La.) and Kyrsten Sinema (D., Ariz.) have teamed up to introduce the fourth paid-parental-leave plan on offer this Congress, and the first bipartisan proposal of its kind. Their bill would allow new parents to obtain an advance on their child tax credit (CTC) to help with the cost during the first year of having a child.
The Cassidy-Sinema plan does not yet have a name, nor has the bill text been released, but according to a summary of the legislation, it would allow parents to collect up to $5,000 in advance from their CTC. For the next ten years, these parents would pay the money back by receiving less from the child tax credit — those who took the full $5,000 would get a maximum of $1,500 annually, instead of the $2,000 maximum set by the 2017 Tax Cuts and Jobs Act. For low-income parents or families who do not qualify for the full “refundable” portion of the CTC, the bill would offer an advance on the CTC benefit for the equivalent of twelve weeks’ wage replacement, and their CTC benefit would be adjusted over the subsequent 15 years.
The CTC advance would also be available to adoptive parents, as long as the child is under six years of age, and as long as the parents claim the benefit within the first year of adopting.
The program would be completely optional, and parents would have a full year after the birth or adoption of a new child to decide whether they wish to opt in. Parents would be permitted to collect the benefit even if they also collect paid-leave benefits through a state program or their employer.
Cassidy and Sinema are the first to propose a paid-parental-leave plan that would temporarily repurpose funding from the CTC. In this way, it is unlike the two Republican paid-leave plans also on offer this Congress, although both of those bills would also involve a repurposing of an existing benefit program.
The first of those bills, the CRADLE Act, is cosponsored by GOP senators Mike Lee (Utah) and Joni Ernst (Iowa) and would allow new parents to receive one, two, or three months of paid-leave benefits in exchange for postponing their Social Security benefits for two, four, or six months.
The second bill, the New Parents Act, is being offered by Marco Rubio (Fla.) and Mitt Romney (Utah). It also would permit new parents to use Social Security benefits to finance up to three months of parental leave, but would let them take those benefits even if they were not employed at the time of a child’s birth (so long as they had a sufficient earnings history). Under the New Parents Act, parents who take the benefit could finance it either by delaying retirement for three to six months or by reducing their Social Security benefits for their first five years of retirement.
Neither bill has gained additional cosponsors in the Senate, although GOP representatives Dan Crenshaw (Texas) and Ann Wagner (Mo.) have introduced the New Parents Act in the House.
Democrats, meanwhile, are pushing for a much more expansive — and expensive — option: the creation of an entirely new benefits program to cover not only paid parental leave, but also family leave and personal medical leave. The plan, embodied in New York senator Kirsten Gillibrand’s FAMILY Act, is to finance the new program by increasing the payroll tax by 0.4 percentage points, split evenly between employers and employees — so, unlike the other three proposals, it would not only create a new entitlement but would be compulsory and force a cost increase on all taxpayers, even those who never use its benefits.
All six Democratic senators currently running for the presidential nomination, along with Senator Bernie Sanders (I., Vt.), have signed on to the FAMILY Act. But there is far from a consensus in the caucus. As of early August, more than a dozen Democratic senators weren’t listed as cosponsors of the legislation, including moderate Democrat Joe Manchin of West Virginia and two vulnerable Democrats up for reelection: Doug Jones (Ala.) and Gary Peters (Mich.).
And, of course, Sinema, who has teamed up with Cassidy to unveil this alternative plan. It’s hard to imagine that many Democrats would prefer the new Cassidy-Sinema proposal to an entirely new entitlement program. But it is conceivable that if enough conservatives consolidate around this plan, enough Democrats might be willing pass the legislation, considering it better than nothing.
Editor’s note: This post has been updated since its initial publication.