because we understand that we are stronger together than apart. i think that two world wars and the cold war taught us that we are stronger together than apart. >> but how can you be together when a country is getting its energy from the person you want protection against or from the group that you want protection? >> because we understand that when we stand together, also in dealing with russia, we are stronger. i think what we have steen -- >> no, you're just making russia richer. you're not dealing with russia. you're making russia richer. >> i think even during the cold war, nato allies were trading with russia and there have been disagreements about what kind of trade arrangements we should -- >> i think trade is wonderful. i think energy is a whole different story. i think energy is a much different story than normal trade.

and you have a country like poland that won't accept the gas. you take a look at some of the countries, they won't accept it. because they don't want to be captive to russia. but germany, as far as i'm concerned, is captive to russia, because it's getting so much of its energy from russia. so we're supposed to protect germany, but they're getting their energy from russia. explain that? it can't be explained. you know that. live coverage about paid family leave. two plans are pending in the committee. one by a republican and the other by a democrat and law make. ers will hear from experts that deal with paid family and medical leave. live coverage now on c-span 3.

>> the senate finance committee on social security pension. s and family policy will come to order. i thank everyone and welcome everyone to today's hearing. examining the importance of paid family leave for american working families. i recognize distinguished colleagues with us senators ernst and gillibrand not here yet but will be. i also welcome ivanka trump and a fervent advocate for children and working families. . pleased to chair this hearing and i thank our colleagues for joining. after senator brown and i make opening statements we'll proceed with two panels of witnesses. two colleagues will give statements on the first panel followed by a second panel offics. perts for their testimony and questions from committee members. my statement begins now. working families are the core of

our social fabric and economic success. american workers have increasingly felt good about their prospects. a recent poll shows economic optimism at a 13-year high. yet some families have been left behind. wages and growth have been stagnant, health care and education costs skyrocketing, american families expect more. over the last two years, i have worked to help families get more money in their pockets and benefits to navigate the ebbs and flows of life. many family miss my home state are seeing last year's tax cut reflected in higher. i work with colleagues on lower health care costs for these families. to consider another thing which may help, today we'll examine a paid leave benefit for working families. 2017 pugh poll shows overwhelming majority support paid sick leave and family leave also have strong public support. yet used on the funding of a

paid leave program vary. the family and medical leave act of 1993 provides most u.s. workers with up to 12 weeks of job protected leave to care for a new child or to address an illness. however, it does not cover all workers such as some small business and part-time employees. and the gauarantee is for unpai leave. some workers cannot afford to take time off. most workers receive some type of paid time off, yet the study indicates fewer workers have access to paid family leave versus other leave and paid family leave is rare in et lower income households. now there are three reasons to support paid leave for workers. i mentioned three. first, improving health outcomes. i'm concerned about infant and maternal health. infant mortality is is higher in

the united states. if a new mother takes paid leave, rates for her and her infant decrease by 50%. second, helping families manage work ask home responsibilities particularly for et lower income worke workers. the pug study reports among individuals taking family or medical leave only 38% in families with incomes less than $30,000 a year receive any pay. for families with higher incomes, 74% receive paid leave. and then thirdly, creating incentives to stay in the workforce supporting economic growth. long-term economic growth is a function of workforce participation and labor productivity with an ageing population it's essential our workforce remains strong. a 2012 rutgers study found that women who work 20 or more hours per week before childbirth and who take paid leave afterwards are 93% more likely to working

nine months post partum compare ed to a woman who does not take leave. another brookings study found that work hours for mothers who took paid leave were 17% higher than before paid leave was instituted. last year's tax cuts bill, we're seeing workers getting some help. a pilot program offered by senators fisher ask king, a tax credit to employers who offer low and moderate income employees at least two weeks of paid leave, numerous companies announced new or expanded paid leave programs after the tax bill passed. including starbucks, walmart and lowest. as we shall see today there's bipartisan interest in expanding paid and medical leave. i'm pleased to convene this it initial conversation to consider policy options and trade off. preserving the retirement benefits promised to american workers is paramount. any proposal that relies on social security cannot weaken social security and ideally us

strengthens. the 2012 trustees report projects that social security trust fund goes bankrupt in 2034. in order to close that shortfall, benefits today would have to be cut by 17% for all beneficiaries including those already collected. we must address this looming crisis. we cannot let that happen doing nothing is not an option. also speaking of social security, another priority is the wind falls elimination provision. although not directly relate odd to today's topic, it must be included in the discussion of preserving and strengthening social security in the future. i'm pleased to convene these panels of experts to consider policies that help working families and create incentives for americans to stay in the workforce and help build the greatest economy in the world. i look forward to the discussion and now i ask senator brown. >> thank you, senator. welcome to senator gillibrand

and ernst, thank you for joining us for this important discussion. thank you tr working ing ting b the hearing to work together to expand social security in the safety net to include paid family leave. it's a welcome glimpse of what we could achieve together if we focus on the needs of working families. right now, the lack of paid family leave is is a drag on the economy and it holds workers back. american families lose nearly $21 billion in wages each year because they don't have access to paid leave. people who work in jobs like ours in the congress and the white house who wear suits, some made in the united states, some made elsewhere, is and have good benefits may not realize that the vast majority of american workers have no paid family leave at all. for too many americans, hard work simply doesn't pay off. when i say we don't value work in this country, i don't talk just about wages. i'm talking about benefits people earn or should earn.

85% of the workforce, 100 million people have no paid family medical leave. the mother has a baby and gets zero paid time off, not a single day us. if she isn't back at work the day after she gives birth, something most of us agree would cruel, she doesn't get a paycheck. this isn't just about new mothers. all sorts of workers face impossible choices. . do they go to work knowing the risk to their own health and others around them or stay home and lose a paycheck. millions of americans or millions face that choice every day. do they send a sick child to school knowing they are risking the health of their daughter and the health of the entire classroom or do they jeopardize their job and give up pay by taking a day off. as they grow older, workers have to care for ageing parents. when sons over the age of 50 leave the workforce to care for a parent, they lose $300,000 in earnings in retirement savings. daughters lose even more an average of $324,000. if we truly value the dignity of

work in this country, if we truly value the dignity of work we need to recognize that paid family leave is something all workers should have the opportunity to earn. today's bipartisan hearings an important baby step forward. members of both parties are coming together to recognize this simply isn't acceptable in a rich, modern economy and acknowledging that we have to expand our social insurance to include paid family medical leave. it shouldn't be a partisan issue. it affects every sector of the economy and workers of all ages with all types of families. paid leave is good for business. a recent survey conducted by ernst young found the majority of companies support the creation of paid family and medical leave programs on the state or federal level that are funded through tax contributions. such a program would be famil r particularly good for small businesses and make these programs more affordable and put small businesses on more even footing with large corporations that can afford bigger benefit

packages allowing them to compete for talent. democrats have put forward a thoughtful approach that i believe should reach consensus. it's a bill that builds in the most successful and popular program we have in this country, social security. it would offer low cost portable benefits that all workers would earn. it would be paid for by workers and employers. it's an approach that's already been adopted by five states, soon to be six and the district of columbia. my republican colleagues share some ideas on the table. i have some ideas on the table i want to thank them for their desire to work together on this issue. democrats are at the table ready to negotiate and reach a solution. unfortunately, the approach some of our colleagues are currently proposing amongst cutting social security for the workers who need it most. using retirement security to fund paid time off from work when you have a child is not paid family leave at all. it's robbing from your retirement to be able to care

for loved ones now. low wage workers and physically demanding jobs are likely to be forced into early retirement because of the toll these jobs take on their bodies. that already means taking social security cut in this plan would only make that cut bigger. an opinion piece for the federalist, the president of the independent women's forum, the group that put forward this idea, wrote that she view this is plan as the first step to, quote, transform the current pay as you go system into one that prefunds future benefits and with assets that belong to individuals. in other words, some of the people pushing this plan view it as the beginning of the process of dismantling social security as we know it. i want to work together as both senators here know, but in a plan that's a first step towards privatizing social security, the bedrock of our social safety net is no place to start. we know that only covering parental leave excludes the vast majority of workers.

three quarters of americans who use leave take time off to care for their own health or that of a seriously ill family member. any national paid leave plan should build on the family medical leave act and reflect the well-established needs laid out in that law. parental leave, personal medical leave and military care giving leave must be able to have honest debate about these issues that we have different perspective, but working towards the same goals. et we want to-and-a-ha navigate changing economy and make sure hard work pays off. that's an important thing to remember. >> thank you, senator brown. before we go to our first panel, let me recognize house colleagues that are here. congressman peter king, lou barletta and ivanka trump. ms. trump, you have done so much to drive attention to this issue

to this point. thank you all for being here and your interest in the role. now to our senate colleagues. our first panel, first from senator ernst of iowa followed by senator gillibrand from new york. they have demonstrated leadership for american workers ask families. we are pleased to welcome you here and look forward to your perspective. >> thank you very much. chairman cassidy, ranking member brown and members of the subcommittee, thank you for inviting me to testify before you today. and i also want to thank my dear friend and colleague kirsten gillibrand. thank you for being an important voice on this issue. the issue of paid leave is incredibly important. millions of mothers, fathers, grandparents and families across the country struggle with the realities of childbirth and infant care while also working hard to put food on the table and raise strong and healthy families. it is long overdue that congress

not just have a conversation on these matters but get serious about a path forward. as a mother myself, i know that being a parent is never an easy task. additionally, throughout my career, i have worked with and heard from numerous working parents i object colluding those on my own staff, who have struggled to navigate the challenges of balancing work with the need to provide safe and supportive care for their new babies. some are fortunate enough to have paid benefits provided by their employers. however, many families in america do not have this luxury. to illustrate just how difficult it is for working moms and dads, i want to share the story of a constituent named jessica. jessica is the epitome of what it means to be an iowan. she's been working since she was 16 and done everything from working at a call center to waitressing, which is her current position. jessica is also married and she

and her husband are the proud parents of two young boys. they workday in and day out to provide for their growing family. along the way it hasn't been easy. money at times has been tight and both jessica and her husband had to decide between working and meeting rent and taking time to care for their newborn. common sense tells us that it's important for parents to spend time with their newborn. the bond that has form ed when parents lay eyes on their child become stronger the longer the time they have to spend together. a recent study by the international journal of child care and education policy found the amount of time that new parents spend around their newborn has a direct influence on the quality of mother to child interactions as well as childhood and adolescent outcomes. paid family leave policies have been shown to increase breast-feeding rates and are

associate d with better infant health outcomes as well as et decreased rates of low birth weight and infant mortality. when jessica had her son carter, she was only able to take two weeks off before returning to work. this is despite the fact that she had a c-section, which made it difficult and painful for her to work in the first few weeks after delivery. she would go to work in the morning, but when her lunch break came, she would rush to the bathroom, pump milk and run home to give it to her husband all within an hour. her husband works nights so when jessica returned home at the end of the day, she only had a few precious hours to spend with carter and her husband before he had to go to work. jessica is expecting her third child and is due in december. she's unsure how much time she and her husband will be able to take off. jessica's experience is a similar story in households

around the country. as a nation, we though we can do better for our families. president trump highlighted paid leave during his state of the union address and his administration was the first to budget for a national paid leave program. through the leadership of i-van ta trump, the administration has worked closely to develop a dialogue with congress. i'm glad to say the members of the house and senate and from both sides of the aisle are finally paying attention to this issue, recognizing that moms and dads across the country are trying to figure out how to ensure their babies are well cared for and nurtured in those precious first few weeks of life. by paying attention to these needs, we are recognizing the important economic contribution of these families who give so much to our communities. our policies should reflect the evolving needs of this workforce and reduce barriers that pose challenges to parent who is are

balancing work and family. as a conservative, i want to craft paid leave policy that cannot only attract consensus, but is viable for families, employers and the economy recognizing that working parents by definition are an essential part of many businesses. few businesses can afford more taxes or more cuts to their bottom line. we have to find a solution that doesn't make our economy worse off or decrease the jobs available to working parents. i feel it is important to target a paid leave benefit to individuals who don't have access to these benefits such as the two-thirds of low-income families that don't have paid leave. these families are also more likely to work on an hourly basis where if they do not work, they do not get paid. they don't have sick leave or vacation or other forms of leave that can help bridge the gap.

for the past few months, i have been working with senators marco rubio and mike lee on the issue of paid leave. we have been exploring how new parents could elect to receive a paid leave benefit through social security. in return for receiving these benefits, participants would defer the collection of their social security benefits upon retirement. we're still working through the complexities, but i'm hopeful we can craft a policy that will benefit most family asks those who need it the most. thank you again, chairman cassidy and ranking member brown, for holding this hearing today. i look forward to working with you on the important issue of paid leave. helping families is an issue we can all agree on, and i hope we can have a productive dialogue on how congress could best help them. thank you very much. >> thank you, senator ernst. senator gillibrand? >> thank you, mr. chairman. thank you, ranking member brown, for hold iing this hearing.

i want to recognize my colleague senator ernst tr her leadership and interest in this bill and this debate that we're having about how to produce a real paid leave plan. . here's the truth. at some point, every person here is going to have a situation where you have to take some time off from your work o to meet and care for a family member. it might be a medical emergency, maybe your spouse is diagnosed d with cancer or maybe you suddenly need to take care of an ageing parent or someone diagnosed with alzheimer's. maybe you're starting a new family or just had a baby like your constituent jessica. whatever the case is, no working american should ever have to choose between their family members and a paycheck. but if you don't have paid leave, that's exactly the choice that you have to make. this is especially true if you are working in a low wage job. that's unfortunately what millions of americans have to deal with every time there's a family emergency. right now, 85% of workers don't have access to paid family medical leave.

and lower income workers are even less likely to have it. we are the only industrialized country in the world that doesn't guarantee some form of paid leave. recent reports have shown that this cost families $20 billion a year. and it also creates the sticky floor, when too many women get stuck in low wage jobs with no chance of advancement because every time there's a family emergency and they feel they need to ramp off, they can only ramp back on with a lower wage job, lower down, and they never get off the sticky floor. so congress needs to catch up. we need a national paid leave program now. the good news is that both sides of the aisle recognize that this is a national problem. individual states are take iinge lead. all over the country with bipartisan bills and state laws that are offering real paid leave programs. and i'm very grateful to my republican colleague who is are committed to supporting a national paid leave program that's based on perhaps a social

security model. but i urge them to support a kpcomprehensive and physically responsible idea called the team act. here's why. first, the family act is an earned benefit, meaning it traveling with you whether you're working full-time, part-time, big companies, small companies, wherever you live, wherever you work. second, the family act the way we have written it is really affordable. it is about the cost of a cup of coffee a week. for you and for your employer. it's about $2 a week on average for all employees. that's not a great deal of money to know that if. your mother is dying that you can be by her side or have a new infant or special needs child to be there when they are needed. it also gives you 66% of your wages guaranteed with a cap. it's affordable, comprehensive, an amount of time that can make a huge difference if you have an illness in your family or a new baby. third, the family act covers all workers, which i think is really important for all these debates that we have. pst not just about women.

it's not just about new babies. all of us have family emergencies. every one of us if our spouses were ill, we would want to be by their sides. but we have that flexibility. that's not true for most working people in this country. we want the to make sure it covers all family members for all reasons. the family act covers birth or adoption, addressing one's own personal medical theeds. we know here in the senate we have been able to address our own personal needs because we have that flexibility. fourth, the family act will level the playing field for small businesses. i have heard this over and over again even when i went with senator heitkamp to north dakota. the people who testified on behalf of this plan were the small businesses. we could never compete with big businesses or be paying two payrolls at the same time or offer this. any incentive that's a tax credit or tax cut doesn't help that small business owner

because they are never going to have enough money to do it. also small states. if you're a small state, your seat is never going to have the money to have a paid leave plan the way that california has one. the way that new york has one. and so this type of idea because it's comprehensive covers all states. a small business today can't compete with a facebook or a google or the big law firms and all the places that can offer paid leave. that's why the small groups have endorsed this bill. it's been endorsed by a lot of larger businesses that provide leave because they know how good it is for their business. they know that paid leave is actually good for profit. it's good for employee retention, good for productivity, good for moral. finally, the family act does not create a false choice between having to take money early from your social security account. it keeps social security account secure so your retirement benefits are there for you. that's why this is the kind of

paid leave plan that we can all get behind because it makes sense. it doesn't cost a lot of money and covers et everybody. it's portable. it works with part-time workers. it works with everybody because it's an earned benefit just like social security. so i hope this is something that people can endorse. it's been endorsed by fortune 500 companies and small businesses because it's good tr business. what's good for business is is good for our economy. et we know it's good for families. i urge all of you to support the family act. >> thank you both. can we have our second panel.

>> i'll now introduce our three witnesses. andrew bigs is the resident scholar at the american enterprise institute. et he studied social security and public pension reform, retirement income policy and public sector pay and benefits. before joining aei, he was the principle deputy commissioner at the social security administration. he's also been an associate director of the white house national economic council, a member of george w. bush's km commission to strengthen social security and a member of president obama's financial oversight and management board for puerto rico. he own holds a bachelors degree from queens university in northern ireland, cam bridge university in london and ph.d. from the london school of economics. vicky shabo focused on paid family and medical leave, paid

sick days and other workplace policies. previously she practiced law at a large international law firm and worked as a political strategist. she also worked on the hill as a staffer on the house judiciary committee. she gararaduated with a bachelof arts and politics in american studies and has a masters degree in political science from the university of michigan. she earned her law degree with high honors from the university of north carolina, where she served as editor in chief of the law review. after law school she clerked for the honorable michael murphy of the u.s. court of appeals for the 10th circuit in salt lake city. caroline is a managing director serve iing as a chief operating officer in the leader of the talent strategy and innovation team. she is responsible for managing financial and strategic operations for the talent function, which is acquisition, development, inclusion, alumni, and a shared services function.

she has been researching and writing on the topic of generational differences in the workforce, including the role that hr organizations can play in managing differences. she holds a ba from boden college and an mba from m.i.t. sloane school of management. we are now pleased to recognize mr. bigs for five minutes for their opening statements. >> thank you very much. chairman cast dirks ranking member brown, thank you very much today for the opportunity to discuss the importance of paid leave and how it might be provided by the social security program. paid a rental leave can provide benefits to children while enable iing mothers to remain attached to their prior jobs, ask ch can increase earnings. the research from the u.s. has found that allowing new mothers a period of paid leave allows them to remain attached rather

than feeling forced to quit to spend time with any their any born. mothers retain a seeb yourty in job skills that allow them to earn higher wages once they return to work. analysis of california's paid leave program finds that increase in female labor force participation and boosts post childbirth work hours by 10 to 17%. most of the so-called gender wage gap is a result of falling female wages post childbirth. if california's results held up. the wage gap would narrow considerab considerably. many large employers already offer paid leave as a way to retain employees. however, smaller employers and start ups often lack the financial capacity to offer paid leave, which places them at a disadvantage relative to larger firms. self-employed workers also lack paid leave. so there's room for public

policy us to help make paid leave more widely available. however, there are practical em pedestrianments to enacting leave. some through a new payroll tax. the political reality is that americans would not favor such a tax. those wo could not or would not take leave and would be forced to subsidize those who do. like wise opinion polls find that americans believe employers should provide paid leave. research finds when employers are required to requiprovide benefits, they often react by reducing wages or hiring fewer employees who would be eligible for those benefits. this could hurt employment opportunities for women of childbearing age. others propose savings accounts. while i don't oppose, young workers have low incomes often carry student loans and have little time to save before a first child arrives. in an article and subsequent work, we proposed an idea designed to work around some of these practical issues. new parents would be eligible to

take a temporary social security benefit to cover parental leave but must increase in social security retirement age or some other offsetting reduction. if the social security benefit were paid for 12 weeks, the beneficiary would accept a normal age approximately 25 weeks higher than under current law. normal age does not prevent from claiming benefits, but does result in a benefit that's about 3% lower than otherwise would be. it's size to conclude that any reduction in future retirement benefits is unacceptable. it paid leave produces anything like the post childbirth ea earnings increases found in california, those higher earnings would boost social security benefits by more than enough to make up for the increase in the normal retirement age. for a low income woman, the 10 to 17% post childbirth earnings in california would lead to a 5 to 9% higher net social security benefit even after the retirement age increased used to

pay back the leave benefit. pardon me. by using social security's benefit formula, leave benefits would be targeted towards low earners who are less likely to provide leave at work. social security based leave benefits would replace 59% of prior earnings to the new mother benefits. finally, it is understandable to worry about adding a leave component to an underfunded social security program. but the cost of this paid leave proposal should be put in perspective. on an annual basis, benefit costs would increase by a max pulmoof 1% in the mid-2040s. later as individuals who claim to paid leave retire, total annual benefit costs would be about 2% lower than under current law. to close, paid leave has benefits for parents, children and for our economy.

many americans are already eligible for paid leave through their employers but by policymaking, congress can extend the benefits to all new parents. thank you very much. >> thank you very much. this is a great sign of progress that this hearing is happening today and it's a real sign of true movement that there's so much agreement about the fact that the lack of paid leave in this country is a real problem ask we need a thriving economy and that paid leave is a big part of creating that thriving economy. there's a lot of numbers being thrown around here and a lot of confusion about how we might do this. it's not that confuse iing. it's quite simple. america's need is clear and doesn't distinguish by political party or care need. to one should be forced to miss their baby's first smile, be prevented from helping a parent or god forbid a child to get cancer treatments or being kept away from caring for a spouse as she recovers from a serious injury sustained in military

service. we at the national partnership per vebtly hope that today is the beginning of a congressional debate that quickly brings urgently needed change for more than 100 million working people who do not have paid leave. in my short time today, i'm going to do my best to touch on three things. the importance of addressing family and medical leave, the family acts reasonable features, which are supported by state paid leave evidence, and grave concerns about the social security penalty approach. although i'm grateful for the incredible research that he's pulled together that shows the benefits of paid leave policies. we agree on those. first, to renekt on america's needs, any plan must be comprehensive. that's for one simple reason. three quarters of people who use the family and medical leave act do so to care for a loved one, or military care purposes. parental leave would leave millions of people behind.

health emergencies should never trigger financial emergencies. yet for too many people, an unpaid medical leave means dipping into savings that are earmarked tr another purpose, taking on debt, putting off paying bills or using public assistance. an investment in paid leave is is an investment in promoting work, financial responsibility and independence. today 43 million people care for ill or injured or disabled lov loveds and most are holding jobs and they are working full-time. our ageing population means the demand for family care will grow dramatically and in communities across the country that will are being ripped apart by substance abuse, paid leave means family members can provide support. people also need and most don't have leave to address their own health issues. this just exacerbates the health

disparities that plague our nation. these are new or expecti ining mothers, working people who sustain a serious injury in a car accident or some other way, older people forced to remain in the workforce longer than ever. the future figures into this conversation. most are low wage, low quality jobs held by women. and the contingent workers face precarious circumstances. this takes me to my second point. as you consider policy options, i urge you to see the family act is a reasonable approach. many voters and focus groups we conducted thought it seemed like a republican idea and they preferred to to the only plan proposed in the budget. or the employer tax credit that was part of the tax bill. that's consistent with what the

states are doing. the duration is modest. it would replace two-thirds of a workers beiges is a minimum level for gender equity, new state laws which have passed with substantial bipartisan support will do more than that. people who need time away tr their jobs would be protected from retaliation. the fund would cover all benefits and administrative costs. i have us never heard anything. to suggest that the paid leave reductions in the states are a real problem for low wage workers. national and state polling also shows voters are willing to pay and businesses are are too. program measures would ensure use has been the case in states and employers that see competitive advantages could top

up benefits. that takes me to my third point. there are four distinct problems with imposing social security penalty. first the cost to working people the plan that was described earlier would result in huge losses of 6% benefit cut or $12,000 for a typical mother of two. women, people of color would be arm harmed the most. my if plan that only covers parents excludes 75% of leave takers and would create crucial ironies for people who use leave early and need a medical leave later on. they would face reduced retirement either way. third, it's wage replacement and maximum benefit amount are too low to help most middle class people and could exacerbate. or any new resources. and would accelerate trust fund

challenges. the heritage foundation and american action forum. the family act is a real paid leave plan. >> can you wrap up? >> it would support families and our economy, reflect shared values of work, family ask care without forcing impossible choices and in this moment of intense divisions it has the potential to unite people. so thank you and apologize for going over. look forward to answering your questions. >> chairman cassidy, members of the subcommittee, good afternoon. thank you for inviting me to testify at this hearing on the importance of paid leave for american families. i appreciate the attention to such an important issue as well as the opportunity to share with you the pleerns experiences in our program. i'm the managing director at the talent organization and have the privilege to enhance employee experiences, processes and policies such as paid family leave. family leave is not just an abstract consent for me.

i took advantage of the program when i had my son jack. our people are our primary and great. est asset and as such their well being is critical to our success. 88% would value a broader paid leave policy to include family care beyond parental leave. this in addition to our focus object innovating our offerings prompted us to shift dynamics in emerging flexibility needs. with the workforce spanning five generations and the changing nature of care giving, we recognize that men and women of all generations face challenges in supporting the well being of their families. if our people were able to balance personal and professional lives, we would reduce turnover and support the culture we aspire to have. one where our people feel supported and building a

meaningful career. we introduced our expanded and wholistic paid family leave program. it provides 16 weeks of paid leave to employees to support a broader range of life events. it eliminates disparity. our family leave program provides our people with the flexibility to schedule the leave to meet the needs of the family. before imlemting this, we assessed the costs and benefits of the new program. salary costs and benefits to attrition, productivity and engagement. our experience over the past 21 months has shown our actual cost to be lower than anticipated and we have already realized an

improvement in attrition. and we have heard an overwhelming great grate. fulness from employees who appreciated the peace of mind knowing they could take the time needed during challenging situations. the paid team leave program impacted the lives of thousands of professionals ask their families. a brother broke her pelvis and she said i was grateful for the opportunity to support through this program. honestly, i don't know what i would have done without access to the paid family leave program. it would have been incredibly stressful. if i tried to keep working, my clients wouldn't have had the best of me, that's for sure. or another employee. one of the many men who has been able to participate in the program. he sent our ceo a thank you note to say because he was able to stay home for 16 weeks with their child his wife was able to

return to her medical practice. as he described it, the new paid family leave program was going to give me the opportunity to spend quality at time with our new baby. we are so happy that we have been afforded this opportunity and it's going to make a meaningful impact in our family life. david's wife was diagnosed with lung cancer. we had no one nearby, he says. having the leave gave me had more time to investigate and arrange support options through the community and the freedom to be there for my wife. take her to appointments and when she was in the hospital to stay by her side the entire time. further analysis and participation data from the past 21 months has shown several interesting outcomes. such is as women are taking slightly longer leaves than previously. men are participating in parental leave at higher rates and taking longer leaves. caregiver leave has remained consistent. and finally creating a culture that empowers people to take advantage of the program has been as important as the program

itself. every day our professionals are helping our clients solve the greatest challenges and make ina positive impact in their communities. leaders understand if we want our people to grow and develop and provide our clients with exceptional service, we need to support them in all facets of their lives. we do not want our people to leave the workforce due to needs at home. it's our responsibility and commitment as an organization to ensure that our people don't have to make that choice between family and career. thank you again, chairman and ranking member brown, for providing me with this opportunity to share with the subcommittee. i look forward to answering any questions you or the other members b may have at this time. >> thank you. i'm told we have great turnout. thank you. i'm told by our committee staff that we should first begin with subcommittee members and then we'll go to our normal in terms of the route of time of arrival. i'm going to defer my questions and ask senator brown to go first. >> thank you, mr. chairman. thank all of you. it was an interesting

discussion. ms. o'boyle, i want to talk about how you came to this decision. as you heard testimony on the ernst proposal and mr. bigs had similar views, they limited to parental leave. you obviously did something more than that. medical leave and caregiver benefits. could you talk about that decision to do much larger than family leave. >> sure. so we realized that all our people were vulnerable to some element of care giving need brought about by a number of factors with so many generations, the changing nature of care giving. that was supported by the market data that i referenced in my testimony. the 88% of respondents would place a value on a broader policy to include family care. while we think that the baby boomer generation is most impacted by care giving needs,

data from multiple sources points to how this impacts all generatio generations. . so a recent study indicates that millennials spend 21 hours a week on care giving duties. we realize d if we wanted to support our people in the way they needed, we needed to broaden the scope of our offering to include broader leave. >> thank you for that. would you kind of break down, if you can, the usage among parental family care giving and medical leave. if you could give us some data. >> absolutely. so one of the misconceptions is that fmla is just about new babies, and it is not. 75% of people use it for family care giving or personal medical leave. most are using it for personal leave. 55% of uses are for somebody with serious health condition.

that's more than three days or requires ongoing treatment from a physician. at the state level, it's closer to 75 to 85% that are using it for temporary disability insurance and that's in california, new jersey and rhode island, which are the states that have had paid family leave and temporary disability insurance the longest. among the family leave portion, the vast majority are pa remember tall leave, but in states with older populations like rhode island, the family care giving claims are higher than in some of the other states. this is why a comprehensive policy is so important. to underscore a point made, millennials and policymakers and employers may think about needing parental leave, but a quarter are millennials. that's folks 18 to 34. many are elevating into the sandwich generation. >> thank you for being in front of this subcommittee a numb of times. i want to make a few comments

before i ask you a couple questions. first of all, put on the record there's nothing to most of us on the lease. the opinion piece that i stated the president's plan as a first step to transform the pay as you go system into what i would assume you as one of the architects of president bush's you never called it -- i don't believe you said privatizing social security in the country, push back because the country saw that way. i think by any fair analysis the rubio plan is first step by the argument of the president's women's forum and any analysis is the sim kiame kind of privatization. the question is this the rubio proposal claims that nun would have to delay the retirement by half as much as the amount of

leave they take. this calculation was debunct which found that someone that takes 12 weeks of leave would have to delay the retirement by 20 to 25 weeks in a permanent benefit cut of 3%. so your construction here is narrow. it's only parental leave not larger as our guests suggest. why do you think we have to force a tradeoff or penalty for new parents who take paid leave as they near and enter retirement? why do you set this as a tradeoff. when the needs are probably greater. >> sure. thank you very much. i'll try to answer your questions and comments in order. for myself, i was not the author of the article in the federalist that you're citing. and i tend not to -- >> i didn't say you were. >> and what i'm saying is it would be mistaken to ascribe the

views to me. in working on the proposal, i never thought of it at all in terms of how it played out with the personal accounts debate, to be frank. whatever side people may be on with the idea of personal accounts for social security i think is pretty clear at this point. that's not going to happen. the personal accounts are proposed as a way of saving the social security surplus back when we had a social security surplus time has solved that problem. so we no long ver have a social security sur floplus to save. this is a mistaken fear. thinking about why we work with the idea of the tradeoff between parental leave and retirement benefits is to get around the issues that i looked at in my testimony. many people do not want to pay an extra payroll tax. that reduces take-home pay. is the payroll tax 0.4% for family act? okay. i think that's taxable payroll,

so that is a $35 billion reduction in people's take-home pay. >> can you hurry up with your answer? >> if you expand it to not just parental leave, you're going to find a lot more public support for it. you're going to have more people interested and more public support for it. >> my thinking on this was to try to do something as perhaps more modest and more doable. >> can you leave it there, dr. bigs? we're -- you're a minute and a half over. >> i apologize for. that the approach is more modest and practical. i think it gets around the issues i discussed in my testimony. >> senator casey? >> mr. chairman, thank you very much. i want to thank the witnesses for your testimony today and for the highlighting of this critically important issue. i'll start with you. this question relates to children with disabilities. i know that in your firm you made some changes that led to a

better policy as it relates to supporting parents of children with disabilities. can you walk through that for us? >> walk through the policy? >> right. >> it's the 16 weeks that i was mentioning earlier. fully paid it for all of our eligible uchlt employees for whatever need they have. whether it's for parental leave or more broad for caregiver leave. that 16 weeks is on a rolling 52-week basis so the employees with continue to take advantage of the leave over the course of their career as their needs change. and we can readily understand why that helps the workforce. can you speak to and i know you addressed this more broadly, before the impact on your company overall. >> we've seen improvements in employee attrition for employees taking a leave. many factors that influence turnover. post leave turnover for women taking leave improved by 32%.

with a 45% improvement for men. this obviously translates into real dollars as we generally consider the cost of turnover to be about 150% of professional salary. less quantity fiable, we know decreasing the stress on our people, experience from care giving needs improves productivity, engagement and performance, all positive benefits for the workforce. and, again, in our experience, we found the benefits are not limited to just those taking leave. we surveyed our people and from that survey and feedback from our people, we know that there is tremendous option value for all of the professionals. even if they don't expect to use the program, they feel secure in their ability to manage the future well-being needs which translates into a longer trajectory in the workforce. >> thank you very much. i want to get to a broader question that goes even beyond family and medical leave. i wanted to first start with the

question of the reality we con front -- confront today which is, i want to make sure i'm not overstating this, but today we're facing a circumstance that workers are at the mercy of the employer. whatever the employer will allow in terms of taking time off whether it's for a loved one or for the care of a child. walk through for us some of the economic benefits of a much broader family leave policy. i know your testimony spoke to. that but just if you could itemize a few benefits. >> absolutely. you so correctly point out that today millions of workers are living in a land where they're subject to a boss lottery. folks that work for them may have won that lottery. but the folks who work for miss o'boil, they live in families. the spouse may not have access to leave. the parent may need to be cared

for. so her employee is going to go care for that parent rather than the sister that lives across the country and doesn't have access to leave. so we're absolutely as a country experiencing huge costs associated with the status quo. and the benefits in contrast would be great. so today families are losing close to $21 billion in wages from a lack of paid leave. but we see that when paid leave programs are in place in states like california, women are more likely to go back to work. they're more likely to earn higher wages. folks are less likely to turn to public assistance programs. they're more likely to be independent. we're seeing on the flip side, when people have eldercare challenges, they're losing 300,000 on income and retirement savings. a small, very small payroll deductions over the course of a person's life, adding up to probably a few thousand dollars over 40 year work cycle, that's such a small amount relative to the cost that families, the economy and businesses are

experiencing now. the 150% turnover cost related to turnover, that's standard. the estimates are 16 and 200%. we're facing huge costs and huge benefits to be made by investing in paid leave. >> thank you. i appreciate the testimony. now i want a few more seconds. i'll put in a plug for childcare because if you think about in terms of the average middle class family, that's among the highest costs they have. we're told in the state of pennsylvania that for a two parent family, center based care for an infant can be 13% of their income which is far too high. if that same circumstance prevails for a single mom, infant care, 49% of the income on average. so obviously as we do family medical leave, we want to focus

on childcare. i know that's for another day. thanks very much. thanks, mr. chairman. >> senator? >> thank you, very much, mr. chairman. and mr. bigs, quickly, i have a second question here. i know that aei written about issues related to single mothers, women's labor force participation and economic opportunity. can you just give us some comment on the economic benefits of paid leave such as labor force attachment and employee retention? >> sure. i'd be happy to. there is two issues. one is that if a new mother feels more confident in in being able to go back to her job, she has paid leave, then she is less likely to quit the job. that retains seniority, certain skills are specific to that job so that when she eventually does go back to work, her wages are higher. but there is a second issue as well that hasn't been touched on which is that if employers are more confident that a woman of child bear age will return to work after having a child, they'll be more interested in

investing in the skills of that female employee, of promoting them. right now if they fear a woman is going to leave their job after having a child, they see them as a risky investment. they may put more attention on male employees wlchlt you p. when you put the two things together, post childbirth paid leaves increases work hours and earnings. that is something that helps them at that point but obviously in building towards retirement as well. >> all right. thank you very much. i won't be able to get answers from all three of you. i'll toss it out. seems to me that what we're seeing a little bit of a difference of a point of view on the panel between how to fund this program. one is to put a new payroll tax in place and one is so access social security. that's the two ideas in play, correct? and you talk about how it's a very small impact for a very big

benefit. has anybody done analysis? i know there are concerns being raised by those focusing on the social security trust fund that the payroll tax should not start getting diverted for other purposes when we have the trust fund in such an unstable position. and so my question is has somebody done the actual economic analysis to see what raising the social security -- or the payroll tax would to social security benefit and the strength of the fund versus the 5:00 sthaes is bei access that is being proposed? we have three minutes. so keep your responses to less than a minute, i'd appreciate it. >> both i think the family act and the social security based proposal, both would lead to increased earnings post childbirth by helping women retain attached jobs. that will help them earn more and also have a higher social security benefit in the future. at the same time, a payroll tax increase in the family act would have a slight reduction -- would cause a slight reduction in earnings as any tax increase

would. i have not tried to balance the two of them out. that is one aspect that would dissuade work and also people feel they may use up part of the payroll tax increase. >> okay. i'll move on quickly. i want to move you on in a minute. please try to be fast. >> sure. both of the proposals are studied. the family act model has been study extensively both at the state level through mod thalz have been run on various state programs through the analysis of the states that have created the programs which haven't seen any decline in wages at all or decline in jobs. and the family act is modelled extensively. it is in the range of what the models show. somewhere between .35 and .45. and this is consistent with what state modelling shows and what state experience has been. so this is a very small cost for a big benefit. and we see it has worked at the state level. i agree will add to the social security could haviers over time because people will stay and work not just when they're

having a new child but even when they have their own family care giving need or personal medical leave. >> all right. and you have about 60 seconds. i'm sorry. >> i'm afraid i can't speak to the analysis of the public policies in a are under consideration. i can tell you from our own experiences but the actual cost that's we've incurred have been significantly less than we had anticipated. because of the business model that we have as a professional services firm, we largely been able to absorb any of the disruption associated with the leave taking and the cost that's we've incurred have been from people converting unpaid leave to paid leave or converting vacation time to paid leave as well. >> all right. thank you very much. >> senator? >> thank you, mr. chairman. this has been a very helpful day. i appreciate all the testimony. it's led to a lot more questions for me. i do understand the benefit of

supporting working families. been an advocate to allow private companies to have flextime so there can be flexibility to see family members and to do what we're doing here. i can see i was going too small. i'm not opposed to paid parental leave. i'm concerned about imposing more federal regulations and mandates on businesses. i was interested to find out that six states are already doing this. i guess i could ask one question, what do we do with those six states? does this sur plant whplant wha were doing? i'll ask that in wran question. i will follow up on the north dakota hearing for small business. for whatever suggestions there were there. and i've always gone with the small business definition and

will in this case of 50 employees or less. that's the obamacare model and the family leave model even though it's not paid. have any of you operated one of these small businesses? >> it's a simple yes or no. >> i have and there is some complicati complications that come in particularly if you're in a very small town. you have very few employees and there is no temporary workforce. there is somebody that has to do the work. so i'm still trying to figure that out and ild be interested in the north dakota approach to that. but my question to all three of you is how would the proposals work for a very small business in a small town where they don't have a temporary labor

workforce. again, short answers because it's not much time. >> to the degree that a paid leave proposal helps women who have children remain attached to the prior employer, it could help them in a sense the employer would lose the employee for a short period while they're taking parental leave. but they wouldn't lose them permanently. >> yeah, the good news is there is a lot of data from small business groups that have surveyed their own members about what would work for them with respect to a paid leave plan. and the social insurance model with shared payroll deductions is something that 70% of small businesses in the country that were surveyed by small business majority support, it's a model that main street alliance that brought together a working group of small businesses decided was best for them because the issue that you're talking about, the replacement worker issue, that's going to come up -- if you have a woman that's given birth,

you're certainly not going to have that person working for you for some period of time. how you manage your work during that time is probably something that maybe you dealt with or that you would be dealing with if you were in that small business now as more women are in the workforce. but what these businesses have found is that the shared cost model frees up the assets to able to either find that replacement worker or pay overtime to the existing workers without them shouldering both the cost of providing leave and the cost of that replacement worker. this is actually a solution that small businesses really have started to gravitate towards. i think your question is a great one. the north dakota example as i understand it is -- >> i'll get that information. i'm running out of time. >> i would just add, you know, obviously or experience is based on a large professional services firm. certainly there is no one size fits all model. one of the things that we have found is that even in some of our businesses that operate in a more structured corporate environment, this created opportunities for people to grow and expand their

responsibilities. so it's become a very nice development mechanism for them. they're able to stretch into new opportunities and allow them to continue their growth and development while covering for people on leave. >> i can see all of the advantages. i just worked it from the stand point of being one of the employers. and what i found was that at the time that the leave ran out that they no longer worked for me e i've been putting in the extra hours in order to cover for the person so they have the time that they need and then there's no backup for me. or for the others that work for me. so i'll have some additional questions in writing to follow up on this. i'm sure there's a solution there somewhere. i just don't think that the two opportunities that we had here are the solution. >> thank you, mr. chairman. thank you for holding this

important hearing and to all the witnesses and for your description of what the benefits of paid leave are. certainly the state of washington having implemented a policy we've been very interested in this. and also we're one of the first in the nation to have family leave. and as someone who then worked in the high-tech sector, i can tell you very male dominated world, they all took family leave. and so i saw the great, great benefits from it. and so thank you for articulating that today too that it is on both sides. they both want to take family leave. also very involved here in implementing paid family leave at the u.s. coast guard. this was very, very important for a coast guard who looked at their workforce and decided that it was 40% women and they want to have retention that they better come up with a good paid family leave policy. so we applaud the coast guard for working with us and others to implement that policy. so as we look at this discussion, one thing i didn't hear, i'm sorry i had to step out, one thing i didn't hear was

the coordination, medical leave and worker retention and productivity particularly as it relates to medical leave. one of the things that i hear often about is that we have workers who literally go to work sick. now how is that good in an environment where people are showing up just because they can't take the time off? i don't know if you have any testimony or any of the other witnesses about this. i didn't hear a lot of discussion about that particular point. and why is this so beneficial in an environment where public health is so important to all of us? >> that's such a great question. thank you for asking it. one of the most interesting studies that's come out recently is from the american cancer society. and they surveyed cancer patients and survivors and caregivers about access to leave. 40% to 50% didn't have any family paid leave or paid medical leave beyond a single -- beyond sick days.

and that the ability to take paid leave during cancer treatment and recovery was actually very highly correlated with workers being able to get back to work more quickly, feeling better, being able to adhere to treatment plans. it is related. there is a study also on nurses with cardiac conditions who are able to return to work more quickly whether they had paid medical leave. we need to think about in the social security context whether there are people that have no other choice but to apply for ssdi when they have a steeroeri health condition. there is no study on this yet. but intuition tells us that there is probably something there as well. if we offer paid medical leave as a benefit like the family act would, we may end up overall boosting workforce participation for family -- for family care giving as well as for personal medical leave. >> i don't know if you or the other witnesses know we're facing a retirement crisis as well in america. i'm very concerned about the lack of savings for retirement that's going to impact all of

us. if you don't have paid sick leave yushgs taking mon leave, you're taking it out of your retirement. >> there was a study coming out ho you about the workforce is getting older and one of the largest growing shares of the workforce are aging workers. those folks have chronic health conditions but they have no other choice but to work in some circumstances. the lack of retirement savings need to stay at work and low wages they're being paid, all of these sort of wrap up together to recognize that we really need to do something. so that those folks can come back into the workforce and do what they need to do to protect themselves in their older years. >> well, i think somebody that works with me said prevention is medicine. for us in the northwest, we're all for. this we get $2,000 to $3,000 per medicare beneficiary and we deliver better care and outcomes. so when talk about somebody in

cardiac care having the time to heal and then go back to work, you're cutting down on everybody's costs. you're cutting down on the whole system's cost by just giving somebody that extra time. and i tell you, with people living longer, we're going to realize that this is a critical part and aspect of care and then it helps all of us on our cost savings. >> and has a care giving component too that we can't forget. the population is aging but the generation -- there are generation that's follow the baby boom are not replacing in the numbers of people. so we're going from one in seven younger people to care for an older person to projection of one in three. that means that care burdens are going to be higher on those people who are probably also holding jobs while caring for an older loved one. and the presence of a caregiver is related to following treatment regimes, reduced hospital readmission. so absolutely this is all wrapped up and part of why -- >> i'm proud our state is one of the first to do family leave. i'm proud that they're one of the first to do paid family

leave. thank you all very much. >> senator? >> thank you. appreciate it very much. thank you for coming. i'm very interested in this for a lot of reasons. i want to make one declaration in the beginning. my dear friend from ohio frequently reminds us all that there are people out there getting ready to privatise things. we're not interested in privatizing social security or the veterans, either one. you follow me on both committees. in case of marcia and the gentleman that got 16 weeks to stay home with his wife's new baby -- he and his wife's new baby, and david that had a son with stage four lung cancer, are those the four you used as examples of benefit and they stayed? what was the benefit they got? did they get 16 weeks paid at their pay sflefl. >> they did. >> that was the benefit? >> correct. 16 weeks fully paid. >> either medical emergency or a family emergency or something like that was the qualifying factor? >> correct. there is a serious health condition for either them or one

of their dependents. >> are you contemplating in the -- it becomes a national program that applies to all businesses and all employees? >> so the family act, the program that i think is the best one based on the research and evidence would create a social insurance fund. it's not 100% paid by employers as the model is and that some leading employers are doing. it's a shared contribution from employees and employers to fund a social insurance program that would result in a 66% wage replacement rate for most workers. >> is it a mandatory participation program? >> yes. and that is why the costs can be so low. they're spread over the workforce and spread over employers and that works for small businesses and it will work for employees as well. >> real quickly, my dear friend was a shoe salesman. i was a real estate broker. we both had small businesses.

i had 1,000 people working for me but they were independent contractors, they were not employees. you had employees. but he had two or three employees. what you might mandate for something with a very small business becomes a cost they can't afford or a -- they reefrp -- reach too far. they can absorb the costs. that's why i worry about if we mandate a benefit that sounds great for everybody, it's not going to apply or be easy to put in place for everybody. it's a program and a mandatory participation program. >> i think what you'll see from studying the state evident and we'll be glad to sit down with you is this actually is beneficial to companies. so .02% that you would pay in from your payroll and in exchange the employees would have access to a paid leave

benefit. for independent contractors, i'm glad you brought that up. we know 10% of the economy is either contingent work or gig workers. that escalates. they pay in as they do to social security so that they would have the protection as well. >> they're paying the quarterly estimates. the employer doesn't withhold. they play in a quarterly estimate. those are very important things to consider. another important thing to consider is this. i ran a company for 30 years and i did pay family leave. i based it on how badly i need them to stay connected. can you do that for independent contractors. i mean you're right about that. having that benefit available saved me some of the best career people i ever had. what you're wanting to do is good for the workers of america but good for the business and people like them. but with very to find a way to

do it where it doesn't bankrupt us at the low end. thank you very much. >> senator menendez? >>ic that, mr. chairman. let me thank the panel for their testimony today. i'm very proud that emergency emergency had a paid family leave program in place since 2009 in addition to a long standing temporary disability program. both programs offer individuals partial income for up to six weeks. they can be used to bond with a newborn or care for a loved one. and it can be used in relationship to a pregnancy or personal illness and injury. so that means that across new jersey thousands of new moms and dad can care for a newborn baby, a parent can care for a critic lyttle child, a spouse can care for a spouse. or a child for an elderly mother or father. there are thousands of people that are sick or injured and

okay taker of themselves rather than going to work sick. that includes people like gentleman zel who was able to use new jersey's paid family leave program to supplement what her company offered and spend a full 12 weeks recovering from childbirth and bonding with a newborn. and then there is layla from new jersey city that used the insurance to pay bills while recovering from surgery. i can go on and on with examples. but what happens is that new jersey families this is why the subject matter at hand here which i care so much about, can care for a loved one or recover from illness without worrying about paying the bills. that's an awful choice to have to make. do i go to work to put food on the table? or do i care for a loved one when he or she needs me the most? do i make sure the rent is paid or recover from surgery? i'm proud that no new jerseyian has to make this choice. i personally am a co-sponsor of

the family act that i think would strengthen and support states like new jersey that have existing paid leave and temporary disability programs. i wonder if you could elaborate for me and new jersey families how the passage of the family act would improve upon new jersey's existing system and other states that may have such legislation in place? >> sure. they're looking to expand in the legislature right now. they're looking for ways it can be improved. what the family act will do most immediately for the constituents in your state would mean that an older person who needs care, who has a child who lives out of state, that child would be able to come and care for their parent even though the child doesn't live in new jersey and not covered by new jersey's paid leave law. creating a national program sets a baseline that means every single person that is working would be able to take time to care for a loved one if they're living in the same state as

their parent or in somewhere else. the family act would add on new jersey's program by providing additional weeks. and by raising the cap on wage replacement. we know that's so important for getting men involved. one of the great successes of california is because it has a higher wage cap. it's increased men's leave taking by more than 200%. we've seen some increase in new jersey but some of the constraints of new jersey's law have not had quite an impact. this would absolutely improve new jerseyian's experiences. >> now let me ask you. are we the only industrialized country in the world that doesn't guarantee some form of paid leave? >> we absolutely are. we are -- it is us and new guinea and a few other small island nations that don't have paid maternity leave and, you know, we don't, with other high wealth countries, we stand out as not providing paid medical leave as well. >> i see some reports that suggest that cost families in our country about $20 billion a

year. is that an estimate you have seen? >> that's correct. it's costing our economy in terms of because it also -- >> isn't it fair to say that too many women get stuck in low wage jobs? >> absolutely. so women are more likely to leave the workplace or to cut their hours and that's just a cycle of that sticky floor that the senator was talking about. >> isn't it also an opportunity to create a more level playing field for small businesses so that that can actually compete with the talent that googles and facebooks are able to afford? >> absolutely. that's one of the reasons that small businesses support paid family leave as the family act would propose. and new jersey businesses themselves have had, you know, no negative impact often say that new jersey's program has had a positive impact on them, especially small businesses. >> and finally, so if companies like deloit and others know that paid family leave is good for profits, good for employee retention, good for

productivity, good for morale, it should be good for anybody else. >> absolutely. >> thank you. >> i'll now take my questions. i have a sense that y'all are in -- you're so big -- you're in 50 states, right? even though the six states and the district of colombia now have paid family leave, you can't say that new york already has a requirement but we have to do it in louisiana. you see where i'm going with that. let's assume that all 50 states had paid family letter. was it reasonable to assume that some states, some businesses would then change the benefit to integrate with the federal program, decreasing the expenditure relative to that which will be received from the federal program snp. >> i can share with you the way we work with states today. >> now we have to imagine that it's 50 states. because now you may work with a state but you still have to have

a policy which works if somebody moves half way between -- you see where i'm going with that. so if california has a law and the person lives in nevada and they're going to go from nevada to california to care for a sick relative, do you have two different policies whether somebody lives in nevada or california? >> deloit has a single policy that applies to all as a national employer. and we work and coordinate very closely with the states to execute they're plans and what deloit does is is, you know, we encourage our people to enroll in both programs, the state as well as the deloit program. and then deloit supplements over and above what a state may offer. >> do you pay the full amount that you normally would? or do you just top off the okay you would receive under our program $100 through the state you're getting $75. we'll give you the difs ferencef 25. >> you decrease the expenditure relative to what the state program is giving. but you make sure that the

individual is held whole. >> correct. >> so if you will, the federal program would surplant that which businesses already doing. which would increase the cost to the federal taxpayer. i'm assuming that what you do would just be probably what other companies did. it is rational to do it that way, frankly. now, mr. bigs, you're very interested in social security. and we know that we have a program that if you're above a certain income level, i think 75% of americans already have paid leave some of sort. we may not call it paid family leave. they get paid leave. and below a certain level, i think $30,000 is the break point that typically people do not get it. i will will say, frankly, my concern is that these folks that are already getting it now have business attracting that which they pay and putting the financial burden on the taxpayer. but let me ask, i'm concerned about social security. and social security, if it eventually requires an increase

in the payroll tax to make up for this looming deficit, i assume that there's limited -- a limit to the capacity to raise the payroll tax in order to pay for the current obligations. there's a limit to how much we can raise that payroll tax without adversely affecting employment. >> with any tax. the more you raise it as a disproportionate effect on economic activities. the dead weight loss of the tax. if we know for those employees above 30,000, i think 75% of them already have paid leave and i'll come you to. you're shaking your head h we know that they're going to subtract their contribution. so money that would be paid by deloit is now being paid by the taxpayer but we're taxing folks with -- in order to pay this

benefit. i'm very concerned about our ability to pay our current obligations and we're surplanting with some federal tax dollars. and we're very sensitive to the fact that some don't have the benefit. but if all we're doing is surplanting that which is being paid by google already, i i'm not sure that is the best deal for the taxpayer. now you're shaking your head no. why are you shaking your head no? >> two reasons. first shaking my head because that statistic about paid leave that the higher income folks, that's vacation. it could be pto. it's not the dedicated paid family and medical -- >> is there a problem with somebody who has six weeks of vacation taking some of the vacation to care for a sick one? for a loved one? >> that is no vacation. >> it may not be a vacation, but it is kind of the reality. my mother lived with me and died with alzheimer's. i know this issue. let me just say.

but i'm very sympathetic to what these small business owners said. i have a small business and thin margins. if they take this and that and i'm paying it and then they leave, i can't run a business. so i'm not being negative. i'm just trying to figure out that tension. >> so vacations also highly coordinated with retention and morale. i think you want your employee to have access to a shared benefit that is funded in a responsible sustainable way family act would be. take a vacation if they need to to rejuvenate and come back to work. >> i think for the small businessman or woman, i was talking to one before the hearing, she was speaking about the burden. so i think for the small folks, the five people in the shop, there is a different dynamic than deloit. more than rhode island, i

suspect. well, i am also out of time. i will also have questions for the record. incredibly illuminating. my final assessment is it is the lower income people that don't have the benefit now and we have capacity to raise taxes. therefore, anything we possibly do with that -- if we ever have to raise the payroll tax should be dedicated to current obligations. and i'm also struck that bore the bigger businesses offering it, we know empirically that they are subtracting that which they pay. they are not adding it to that which the government benefit would be. and i think we have to take that into account as we fashion this. senator brown, you have another question? >> no more questions.

>> i think it's a question, mr. chairman. i thank the three panelists. what values we have as society and we passed within the last year a tax cut that were 80% over the years, 80% of that tax cut goes to the wealthiest 1%. we can't afford to do this. we can't afford to expand the social security system and pay for it in a responsible way. i really do think it's what priorities do we set? of course, there are limits. it's what priorities we set, especially -- i feel good about what you've done. i know not everybody that works with you works at your farm as upper middle income or higher. but a lot of higher percentage of a firm like yours then a lot of businesses and you've provided for them very well. but a whole lot of people when we talk about the dignity of work a whole lot of americans were -- what is it, 40% of americans don't have $400 if their car breaks down. and what do we do for that group of people?

this congress falls all over itself to give breaks to the large banks, falls all over itself to take away health care. a bunch of people dress like me in suits that get good health care to take it away. yet, we can't take care of the people that you're arguing about. those are my remarks. thank you for doing this hearing. >> i'll add to your remarks. i'll say the tax cut did result in multiple companies raising the general ras ti fosity for p. if we put forward a plan which cannot be sustained and that is many of our programs now. if you just look at how they are telling us that medicare will be bankrupt in eight years and the social security trust fund by 2034 and indeed if we bail it out, we have to cut benefits by 17% now. i think we have to not only -- we have to have a compassion which we understand and can persist and not just be a feel good for the moment. thank you all for your

consideration, your thought and for your coming to testify. i adjourn.

tomorrow, peter strzok testifies about the clinton e-mail investigation and russian interference in the 2016 presidential election. live coverage beginning tomorrow morning at 10:00 eastern here on c-span3. online at c-span.org and on the free c-span radio app. >> brett kavanaugh of the united states court of appeals for the district of colombia is president trump's nominee for the supreme court. follow the confirmation process on c-span as judge kavanaugh meets with key senators this week on capitol hill followed by senate confirmation hearings and the vote. watch live on c-span, watch any time on c-span.org or listen with the free c-span radio app. >> c-span, where history enfoulenfolds

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