AEI-Brookings Working Group Calls for Study of New National Temporary Disability Policy

The AEI-Brookings Working Group on Paid Leave issued a new report Friday, calling for a new federal paid parental leave benefit and study of a new national temporary disability policy that would bridge the gap between paid leave for short-term illness and longer-term disability coverage.

The working group was unable to find consensus on a paid family medical leave benefit. “Family care was the area where we had the biggest disagreement,” said working group co-chair Isabel Sawhill, a Senior Fellow in Economic Studies at the Brookings Institution. “It was a ‘no-brainer’ for progressives, but some of our conservative members felt it was premature, there wasn’t that much unmet need, and it was open to possible additional expense and abuse.”

The group had previously released its ideas for paid parental leave, endorsing a compromise proposal of eight weeks of paid parental leave at 70 percent of wages, with a maximum benefit cap of $600 per week.

Paid parental leave would cover time away from work after the birth of a child. Paid medical leave would cover long-term absence from work following a serious illness and/or surgery. Paid family leave would cover time away from work to care for an ill family member or to handle a family emergency.

On paid medical leave, Brookings Nonresident Senior Fellow Harry Holzer said the working group recognized the potential benefits for employers – “better productivity, better retention, better labor force participation” – but also potential costs: “Disruption, the cost of temp workers, potential discrimination in hiring, and higher costs on top of other mandates.”

The group found potential middle ground in the possible creation of a temporary disability insurance program that could be a bridge between short-term disability and Social Security Disability Insurance. Holzer and others felt a new benefit could at least be partly financed through reform savings from the SSDI program. SSDI offers benefits after a five-month waiting period to Americans under age 65 who have accumulated sufficient Social Security credits and have a physical or mental disability expected to last 12 months or result in death.

“I do think it has promise as a bipartisan solution,” said group member Abby McCloskey, founder of McCloskey Policy, LLC.

The panel on paid family medical leave made clear the working group’s differences on the topics. Ben Gitis, Director of Labor Market Policy at the American Action Forum, said “there is simply a lot we do not know about this issue,” and contended that many employers are actually offering paid family leave, “they’re just not calling it paid family leave.”

Angela Rachidi, a Research Fellow in Poverty Studies at AEI, said that she “generally remained unconvinced that the kinds of policies we had talked about would be effective in achieving the goals we set out.” Said Rachidi: “When you are talking about a large federal program, I think we need to have more to go on than ‘it would be nice to have.’”

Jane Waldfogel, Compton Foundation Centennial Professor of Social Work for the Prevention of Children’s and Youth Problems at Columbia University, contended that the concerns raised by her conservative colleagues were far from insurmountable. “The sticking points are around disruptions to employers and cost-effectiveness and both can be dealt with pretty easily.”

Heather Boushey, Executive Director and Chief Economist at the Washington Center for Equitable Growth, emphasized the growing popularity of all kinds of paid leave in a variety of public opinion polls. “The momentum is behind comprehensive paid family and medical leave – that’s also where the American public is.”