FAMILY LEAVE: Fact Sheet - 9/29/92 September 29, 1992 PRESIDENT BUSH SUPPORTS FAMILY LEAVE o President Bush Strongly Supports Family Leave Through Tax Credits Rather than Costly Government Mandates. In September, President Bush sent to Congress the "Family Tax Credit Act of 1992." President Bush's proposal enables 80% of the nation's workplaces to provide family leave for their employees without eliminating jobs or stifling economic growth. -- President Bush's plan will provide a refundable tax credit of up to $1,200 a year per employee for businesses that offer their employees 12 weeks of family leave. -- Companies would be eligible for reimbursement through tax credits for employees who take leave for: birth of a child; placement of a child with the employee for adoption or foster care; care for a seriously ill child, parent, or spouse; a serious health condition that prevents the employee from performing his or her job. -- The President's proposal is not federally mandated leave. Instead, it gives employers a persuasive incentive to adopt family leave polices that preserve the flexibility to target the specific needs of their employees. -- Unlike other proposals that would shift the cost of mandates to business, President Bush's proposal would be paid for by specific spending cuts and revenue offsets. Government Mandates on Business Cost Jobs. The mandated Family and Medical Leave Act would replace the individually- tailored benefits prized by American workers with a "one size fits all" federal mandate that would place a costly burden on American business, eliminate nearly 60,000 jobs, reduce overall benefits to workers, lower American productivity and hurt U.S. competitiveness. -- The Small Business Administration reports that the Family and Medical Leave Act would cost over 59,000 jobs as businesses struggle to cope with this costly government mandate. -more- -2- -- In a recent survey by the Gallup Organization and the National Federation of Independent Business, 76 percent of employers said that the Family and Medical Leave Act would force them to establish stricter personnel policies. The threat of legal reprisals makes employers less willing to negotiate individualized arrangements, making it harder -- not easier -- to develop the flexible work schedules and job sharing plans that best accommodate working women and parents. o Democrat Proposal Hits Small Businesses Hardest. According to a study by the Small Business Administration, a federally mandated 12 week leave policy would cost American businesses over $3.3 billion this year alone. The Democrats' "one size fits all" bureaucratic mandate will place an onerous burden on small businesses, limiting their ability to offer voluntary flexible benefits to employees and reducing productivity. New Government Mandates Hurt More than They Help. The mandated family leave bill being pushed by the Democratic Congressional leadership would impose significant new government mandates and costs on American business. As the President said in vetoing new mandates in 1990, "We must ensure that federal policies do not stifle the creation of new jobs, nor result in the elimination of existing jobs." New Mandates Are Not Needed. The Family and Medical Leave Act is out of step with the needs and desires of the American worker. A 1991 Penn and Schoen national survey found that 89 percent of Americans prefer to have benefits set by employer- to-employee negotiations, rather than imposed by federal mandate. An earlier Gallup poll showed that just one percent of respondents believed parental leave was the "most important benefit" companies provide. Many preferred a more flexible arrangement allowing them to take leave for other kinds of medical emergencies. Market Incentives For Leave Serve People Best. The market also provides incentives for employers to provide family and other medical leave. In an increasingly competitive global marketplace, companies must provide benefits to workers in order to maintain productivity. A Small Business Administration survey showed that between 74 and 90 percent of companies already provide some type of family or medical leave to employees. Adoption of the President's new tax credit plan will stimulate business to improve and expand upon existing leave policies. # # #