Where Hillary Clinton’s Paid Family Leave Proposal Splits From What’s Worked in the States

Clinton said this week paid family leave is possible by taxing the wealthy but states have done so without soaking the rich.

Hillary Clinton speaks during a campaign rally in Las Vegas on Wednesday. (Bloomberg AFP/Getty)

In her opening statement at the first Democratic debate Tuesday, Hillary Clinton mentioned the need for paid family leave, and when asked about it later, she said it was possible to pay for it by having the wealthy foot the bill.

The line may be good fodder for Democrats, but looking at how states have done it, as well as current national proposals, show other ways to pay for the policy without soaking the rich.

The longest-standing example of the program is in California, the first state to pass paid family leave in 2002. Paid family leave is part of the State Disability Insurance program, so workers that pay into that insurance program are also covered for leave.

The other two states to enact paid family leave, New Jersey and Rhode Island, have also used their already-existing temporary-disability-insurance programs (Washington state passed the law, but it has yet to be enacted).

“The three existing state-paid family-leave programs are funded by employee contributions,” Jane Waldfogel, a professor at Columbia University School of Social Work, told National Journal in an email. A proposal in Washington, D.C. to give workers sixteen weeks of paid leave would be funded by employer contributions. “We are just starting to have the conversation of how paid leave should be funded.”

During the debate, Clinton also pointed to legislation proposed by New York Democratic Sen. Kirsten Gillibrand, who has acted as a surrogate for Clinton. But in that piece of legislation, called the FAMILY Act, the program would be funded by 0.2 percent of wages from both employees and employers, which is to say that contributions would come from both employees and employers.

“Senator Gillibrand believes this next election is an opportunity to elect members of the Senate and House who will vote for paid leave, and a president who will sign it into law and as Hillary Clinton said Tuesday, she'll do just that,” Marc Brumer, a spokesman for Gillibrand, told National Journal in a statement.

Heather Boushey, executive director and chief economist at the Washington Center for Equitable Growth, who is also advising Clinton in a private capacity, has proposed having paid family leave housed within the Social Security Administration.

“The way we’ve seen it be effective in U.S. is through payroll taxes,” Boushey told National Journal. “Clearly there are a variety of different ways.”

But Boushey also said there numerous other ideas about how to make paid family leave workable and that it was important to start a larger conversation, but insisted there were certain policy aspects to keep in mind.

“One thing from a policy perspective to keep in mind, if you are going to provide a program, you need to make sure it has a stable revenue source,” Boushey said.

There is also a matter of perception for paid leave. By having employer contributions instead of taxing the rich, paid family leave could then not be seen so much as a government redistributive program where money from one group is given to another.

“The idea, 'I pay in what I get out of it,' seems fair to me,” Boushey said.

Clinton’s loud support of paid family leave certainly shows that it will be crucial part of her larger policy platform as a candidate, but as other states have shown, paying for social welfare doesn’t require class warfare.

Correction: A previous version misspelled Marc Brumer's name.