The plan marginally accelerates the depletion date.

Accordingly, the upfront costs of the paid leave program will essentially accelerate the Social Security Trust Funds’ exhaustion date. Based on the costs estimated in this analysis, however, it will not substantially accelerate that date. Rather, it would likely advance the exhaustion date by about six months, with this estimate subject to a great deal of uncertainty. This accelerated exhaustion is driven by reductions in net interest income from the higher upfront costs, which leaves the Trust Funds with reduced assets than would have otherwise been the case. From 2019 to 2034, the leave proposal would add $226.2 billion in costs to Social Security prior to the Trust Funds’ exhaustion. To the extent that Social Security is in a cash flow deficit, all new costs would reduce net interest income to the Trust Funds, reductions which would compound over time.

The proposal, however, would not work so well in practice because of Social Security’s troubled financial outlook. Social Security already runs a cash deficit and its Trust Funds are projected to go bankrupt by 2034. Under the IWF proposal, the vast majority of workers who claim paid leave benefits would retire after 2034 and would not offset the cost of their leave until Social Security has already gone bankrupt. Consequently, the paid parental leave benefit would add $226.2 billion in new costs to the Social Security Trust Funds prior to exhaustion (financed by federal borrowing) and modestly advance the Trust Funds’ depletion.