Each and every month, more than 62 million people -- nearly seven out of 10 of which are retired workers – receives a monthly benefit check from Social Security. This check is relied upon by 62% of current retirees to account for at least half of their monthly income. Needless to say, when it comes to Social Security, seniors tend to pay close attention to what's going on policy-wise.

Among the biggest issues for the program is an estimated $12.5 trillion cash shortfall between 2034 and 2091, according to the 2017 Social Security Board of Trustees report. Without raising additional revenue through taxation, it's predicted that Social Security's asset reserves will be completely exhausted by 2034, leading to an across-the-board cut in benefits of up to 23%. With so many retirees relying on Social Security as a major component of their monthly income, such a forecast is downright scary.

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A terrible Social Security idea is gaining traction

With such a big problem looming just 16 years away, beneficiaries would like to see lawmakers tackling ways to buoy their future payouts. But instead, the only Social Security idea currently gaining traction in Congress is one that'd likely see the program weakened.

In January, the Independent Women's Forum, a conservative think tank in Washington, D.C., introduced the idea of using Social Security benefits as a means to bolster paid leave following the birth of a child. Under the proposal, the details of which have mostly been kept under wraps, working parents would be allowed to receive an early weekly benefit from Social Security, based on their earnings history, while on parental leave for up to 12 weeks. In return, they'd have to wait longer to claim retired worker benefits, which most folks become eligible for at age 62. Waiting longer should ultimately reduce expenditures from the program, saving money over the long run.

The proposal has since garnered the attention of three GOP senators: Marco Rubio (R-Fla.), Joni Ernst (R-Iowa), and Mike Lee (R-Utah). All three are currently working together to turn the Independent Women's Forum's idea into legislation that could soon be unveiled in the Senate. 

On the surface, the idea might seem intriguing. After all, providing this income from Social Security takes the burden of paid leave off the employer. It also provides much-needed income for parents when most industries fail to offer any sort of extended-leave programs to new parents.

Yet, the grim reality is that this is a terrible, awful, no good, very bad, idea -- and there's now a study to prove it.

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Using Social Security dollars to extend parental leave is a really bad idea

Back in February, I examined three of the biggest issues with this plan -- and they still hold true.

First of all, the perceived long-term benefit of a reduction in expenditures is unlikely to be realized for at least three decades. While reducing expenditures sounds noble, Social Security's asset reserve depletion date is just an estimated 16 years away.

Secondly, funneling Social Security dollars to parents on leave would work to exacerbate the program's cash outflow. Loaning out early benefits would likely mean adjusting the projected 2034 asset reserve depletion date forward, further compromising payouts for all beneficiaries.

Finally, early parental-leave benefits could still harm businesses. Even though they wouldn't be directly responsible for paying employee salaries, the extended absence of key workers for up to 12 weeks could adversely impact production and result in reduced output. That's bad for businesses and the U.S. economy. 

Now, there's even more fuel for the fire, thanks to a new analysis from the Urban Institute. The analysis found that parents who took a single 12-week paid leave would have to delay their Social Security checks by between 20 and 25 weeks, decades later. Doing so would reduce lifetime payouts by 3%, per the Urban Institute. Should parents have four children, and therefore take four 12-week paid leaves, lifetime benefits would be reduced by about 10%. 

Dice and casino chips lying atop Social Security cards.

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Making matters worse, around 25% of these loans wouldn't recouped by Social Security as a result of workers dying before they reach full retirement age, receiving disability insurance, or not working enough to qualify for retired worker benefits.

In other words, a paid-leave program that essentially "loans" from Social Security would accelerate the exhaustion of the Trust's asset reserves and reduce the lifetime benefits received of those who take part. Mind you, all this would happen while the program is facing a potential cut in benefits of up to 23% in just 16 years' time. That would essentially be a dual cut in benefits, spread over the course of a few decades, for parents who took this "loan."

While I'm not opposed to finding ways to improve parental-leave options in the U.S., using Social Security as a piggy bank is not one of them.

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