Bloomberg Tax
Free Newsletter Sign Up
Bloomberg Tax
Welcome
Go
Free Newsletter Sign Up

Left Out of Manchin Deal, Paid Leave Backers Look to Future

July 29, 2022, 3:18 PM

Senate Democrats’ latest tax and climate reconciliation deal excludes a paid family and medical leave program, likely pushing any chance of enacting nationwide paid leave to a future Congress where it could require a bipartisan compromise.

Sen. Joe Manchin (D-W.Va.) and Senate Majority Leader Chuck Schumer (D-N.Y.) unveiled a deal July 27 that features a 15% corporate minimum tax, flexibility to negotiate drug prices, and a push to increase tax enforcement, as well as funding for energy and climate change proposals.

This measure is far less extensive than last year’s proposed $3.5 trillion spending package, which initially called for as many as 12 weeks of paid family and medical leave. Since that larger package faltered—and the paid leave proposal with it—conversations around introducing a robust entitlement program haven’t gained ground, leaving Democrats questioning whether or when they might have another chance to pass a comprehensive federal paid leave program.

Since last year, and especially after the US Supreme Court’s decision to overturn Roe v. Wade, Republicans have stepped in to present their own benefits proposals for family and medical leave. Sen. Marco Rubio (R-Fla.) introduced in June a “pro-family” framework, which includes a pitch for parental leave that he’s put forth previously. But it stops short of providing employees with direct payments to take time off, and instead would require workers to pull from their Social Security benefits to finance their leave.

Rubio’s plan and previous Republican paid leave proposals, such as providing tax credits to employers that offer leave benefits, stand in contrast to the policy preferences of Democrats and advocates who argue government should guarantee paid leave access to all workers, particularly low-income workers who are least likely to have benefits through their jobs.

“Not including any form of care, especially paid leave, in the ongoing public health, caregiving, and women’s jobs crisis is frankly insulting to the women and caregivers who carried us through the last couple years,” said Dawn Huckelbridge, director of Paid Leave for All, a coalition of groups supporting a national paid leave program.

Huckelbridge cited her group’s recent survey of voters in Senate battleground states, which shows strong public support for a federal paid leave policy. “Rubio’s policy is not paid leave, but we absolutely welcome and stress the need for a bipartisan effort on a real paid leave policy,” she said.

The Dobbs decision striking down the constitutional right to abortion adds urgency to the need for paid leave, particularly parental leave, said Sherry Leiwant, co-founder and co-president of the advocacy group A Better Balance.

“We’re going to have to fight harder to make our policymakers understand that these issues are really important for women,” Leiwant said.

Momentum Remains, Details Cloudy

Senate Democrats were upbeat about the reconciliation deal, even without several of their priorities.

“There are a lot of things that our country needs that are not in the reconciliation bill. Paid family leave, universal childcare, and a child tax credit. But we can only pass what we can get 50 votes for,” Sen. Elizabeth Warren (D-Mass.) said Thursday. “So, I’ll celebrate what we got.”

Despite its omission from the reconciliation deal, there remains growing interest in paid leave policy, including among Republicans who showed little interest in it just five or 10 years ago, said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities.

The Trump administration, for example, explored paid family leave options, and Rubio previously has introduced a version of his plan (S.2764) relying on Social Security funds.

“We’re trying to find something that doesn’t grow government, that doesn’t create a new government program, that doesn’t disincentivize businesses from hiring people who are going to get pregnant,” Rubio told Bloomberg Law. “It’s just an option that would be available. Obviously, we’d love to see more businesses provide it, but we’re not going to mandate they do it.”

Business groups, including the US Chamber of Commerce, have voiced tentative support for a federal program depending on how it’s designed. For the Chamber, that meant writing a federal law that would override the various state paid leave laws to spare large employers from having to comply with a patchwork of state rules and standards—among other business-friendly provisions.

Progress on state-level paid leave policy, however, continues. Two more states, Delaware and Maryland, enacted comprehensive paid leave entitlement programs this year, bringing the count to 11 states plus the District of Columbia with paid leave laws on the books, although several of those programs are still being implemented.

“People are disappointed, of course, but there still remains a lot of momentum and a lot of enthusiasm” for passing a comprehensive federal paid leave policy, Romig said. “We know, and we’ve known for some time, that it’s not going to happen this year.”

Unsure Path Forward

What’s not clear are the details of a policy that could win broad enough bipartisan support to pass in Congress, particularly if Republicans retake control of the one or both chambers in November’s elections, Romig said.

The paid leave interest from Republicans seems to be primarily focused on helping new parents, said Patrick T. Brown, a fellow at the Ethics and Public Policy Center, and so a plan targeted to parental leave only might be the most likely to win GOP support.

“In this new post-Dobbs era that we’re in, there’s an appetite on the right for pro-family, pro-parent policies,” he said, adding that paid leave and expansion of the child tax credit are ideas that theoretically could advance under a divided government with Republicans controlling Congress and Biden in the White House.

Sen. Ron Wyden (D-Ore.), a paid leave supporter, said Thursday that including a paid leave proposal in this recent deal “was going to be a big lift.”

“I want people to understand that this is not a piece of legislation that nibbles at the edges,” he said. “These are transformational changes.”

To contact the reporters on this story: Paige Smith in Washington at psmith@bloomberglaw.com; Chris Marr in Atlanta at cmarr@bloomberglaw.com; Jalen Brown in Washington at jbrown@bloombergindustry.com

To contact the editors responsible for this story: Genevieve Douglas at gdouglas@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com