[Congressional Record Volume 145, Number 98 (Tuesday, July 13, 1999)]
[Senate]
[Pages S8375-S8378]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DODD (for himself, Mr. Kennedy, Mr. Leahy, and Mrs. 
        Murray):
  S. 1355. A bill to establish demonstration projects to provide family 
income to respond to significant transitions, and for other purposes; 
to the Committee on Health, Education, Labor, and Pensions.


    The Family Income to Respond to Significant Transitions (FIRST) 
                             Insurance Act

  Ms. DODD. Mr. President. These last several weeks have been filled 
with profound questions about the strength of the American family and 
the priority we place on our children and on meeting the 
responsibilities of parenthood.
  In my view, we must start at the very beginning. We know that some of 
the key moments of parenthood are in the first days and weeks of a 
child's life. These are the moments when parents fall in love with 
their children--when they learn the feel of their soft hair, the joy of 
their touch and the immense peacefulness of their sleeping faces.
  These emotional bonds carry parents and children through all the 
challenging years that intervene between infancy and adulthood--from 
the terrible twos to adolescence.
  Research tells us this bonding with parents is critical to a child's 
emotional, cognitive, and physical development. Scientists have 
produced vivid pictures of children's functioning brains--so not only 
do we know, we can also see that there is a difference between the way 
the brain of a neglected child and the brain of a nurtured child works.
  Parents bonding with their children is not something one can mandate 
by law--but we must make sure that our policies support parents in 
these early days. And frankly, today as we sit on the cusp of the next 
millennium, we offer parents very limited support at this most critical 
time.
  Today's working parents have less time to spend with their infants 
than past generations. Compared to 30 years ago, there has been an 
average decrease of 22 hours per week in time that parents spend with 
their children. That is nearly one day out of every week--or 52 days a 
year.
  More parents work today than every before--fully 46 percent of 
workers are parents. Nearly one in five employed parents. Nearly one in 
five employed parents are single, and among these 27 percent are single 
fathers. The number of parents who were employed increased from 18.3 
million in 1985 to 24.1 million in 1997.
  One could argue whether these trends are going in the right 
direction. But no one can argue that they are the facts--the reality in 
which American families live everyday. And, my view, that reality is 
where public policy must operate.
  Since 1986, I've worked, with many of my colleagues, to help working 
Americans meet these demands and care for new children and their close 
family members. In 1993, the Family and Medical Leave Act was finally 
signed into law, establishing a key safety net for America's families. 
I couldn't have done it without the support of my colleagues here in 
the Senate and the House, and without the support of the President.
  But let's face it--the FMLA is like 911 for working Americans. It 
provides up to 12 weeks of unpaid leave to qualifying employees for the 
birth or adoption of a child, their own illness or the serious illness 
of a parent, child or spouse without fear of losing their jobs or 
health insurance. But the fact remains this leave is unpaid--and that 
is a high bar for most American families.
  While millions of Americans--many estimate over twenty million 
families--have benefitted from the law and have taken the time they 
needed, for many it has been at major financial cost. In fact, taking 
an unpaid leave often drives employees earning low wages into poverty. 
Twenty-one percent of low-wage earners who take a leave without full 
wage replacement wind up on public assistance; 40 percent cut their 
leaves short because of financial concerns; 39 percent put off paying 
bills; and, 25 percent borrow money.
  And there are many more families who do not take a needed leave 
because they can't afford it. Nearly two-thirds of employees who need 
to take a family or medical leave, but do not do so, report that the 
reason they did not take the leave was that they could not afford it. 
These are families with brand new children or where a spouse, parent or 
child is seriously ill.
  Many employers do provide workers with some pay during these 
difficult times--but the benefit of these policies is not distributed 
equally. Employees with less education, lower income, female employees, 
employees from racial minority groups and younger employees are less 
likely to receive any income during leaves.
  Our nation is a leader in so many areas. And yet not when it comes to 
helping families balance the responsibilities of work and home. Nearly 
every industrialized nation other than

[[Page S8376]]

the United States, as well as most developing nations, provide parents 
with paid leave for infant care.
  I believe that we should learn from these nations, our own 
experiences, and the calls of American families and provide parents 
with the means to access desperately needed leave to care for new 
babies. This effort cannot be out of reach for a nation as rich and 
prosperous as our own.
  The bi-partisan Commission on Leave, established as a part of the 
Family and Medical Leave Act and which I chaired, recommended further 
consideration and exploration of paid leave policies. Specifically, and 
I quote from the unanimous recommendations of the Commission, ``the 
Commission recommends that the development of a uniform system of wage 
replacement for periods of family and medical leave be given serious 
consideration by employers, employee representatives and others.'' The 
Commission went on to recommend that we should look to expanding 
employer-provided systems of paid leave, and expanding state systems 
like unemployment insurance or temporary disability insurance, in 
states with those systems.
  Mr. President, this is not a pie in the sky idea. Many states have 
already recognized the need for such support for new parents. 
California, New Jersey, three other states and Puerto Rico have in 
place temporary disability insurance programs, that at a minimal cost 
to employees and employers, provide support to mothers who are 
temporarily disabled after pregnancy and childbirth as well as other 
workers temporarily disabled.
  Other states are moving to provide income to families through 
different mechanisms. Massachusetts, Vermont, Washington and several 
other states are all considering legislation to expand their state 
unemployment compensation systems to provide partial wage replacement 
to workers taking family or medical leave. Just a few weeks ago, 
President Clinton announced his support of these bold initiatives and 
directed the Department of Labor to work with the states to allow for 
this expansion of these state unemployment insurance systems.
  But I believe there is more for the federal government to do. We 
should be a partner in these state efforts and help spur the 
development of the unemployment insurance model as well as other 
financial mechanism that will, I hope, make paid leave a reality for 
all new parents in America.
  I am proposing today legislation that would establish a federal 
demonstration program--which I am calling FIRST (Family Income to 
Respond to Significant Transitions) Insurance.
  FIRST Insurance would support state demonstration projects that 
provide partial or full wage replacement to new parents who take time 
off from work for the birth or adoption of a child. States could also 
choose to expand these benefits to support other care giving needs, 
such as taking time to care for an ill parent, spouse or child, or to 
support parents who choose to stay home with an infant.
  These would be state or community-based projects, entirely 
voluntary--in no way mandated by federal law. Clearly, there is already 
much going on in this area. Thousands of employers offer their 
employees and their families paid leave. There are private insurance 
systems that cover wages in various circumstances including the birth 
of a new child. There are state and local dollars that supplement the 
incomes of new families as well as protect families at other times of 
economic crisis. These federal dollars would leverage these state, 
private and other dollars to expand access to paid leave to more 
parents.
  The demonstrations funded will form the basis of a large-scale 
investigation of the most effective way to provide support to families 
at these critical times in a family's life. Key questions to be 
answered include the costs of these projects, the reach and the impact 
on families and children. The demonstrations will also allow 
comparisons of different mechanisms to provide leave--including 
expansion of state unemployment insurance systems, temporary disability 
programs, and other viable mechanisms.
  Mr. President, when a person is injured on the job, or when someone 
loses their job because of a plant closing or some other factor beyond 
their control, our nation rightly protects their families from the risk 
of catastrophic financial loss. That's the purpose of workman's 
compensation and unemployment insurance.
  If we can protect families at times like this, shouldn't we protect 
them at another time of crucial family need as they struggle to meet 
the joyful challenge of raising a newborn?
  Mr. President, this initiative is just one part of a better deal we 
owe to America's families. Just as the horrible tragedy in Littleton, 
Colorado was a wake up call to parents across the country, it must be a 
wake up call to us to re-examine our policies around children, families 
and parenthood.
  There is much to be done--child care, education, expanding the basic 
protection of the Family and Medical Leave Act to more workers, 
intelligent gun control policies, and better alternatives for our youth 
out of school. But I believe a key piece is supporting parents in the 
very first days, weeks and months of a child's life--and hope that we 
can work together to make sure these all important days are possible 
for all parents.
  Mr. President, I ask unanimous consent that this measure be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows.

                                S. 1355

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Family Income to Respond to 
     Significant Transitions Insurance Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) nearly every industrialized nation other than the 
     United States, and most developing nations, provide parents 
     with paid leave for infant care;
       (2)(A) parents' interactions with their infants have a 
     major influence on the physical, cognitive, and social 
     development of the infants; and
       (B) optimal development of an infant depends on a strong 
     attachment between an infant and the infant's parents;
       (3) nearly \2/3\ of employees, who need to take family or 
     medical leave, but do not take the leave, report that they 
     cannot afford to take the leave;
       (4) although some employees in the United States receive 
     wage replacement during periods of family or medical leave, 
     the benefit of wage replacement is not shared equally in the 
     workforce, as demonstrated by the fact that--
       (A) employees with less education and lower income are less 
     likely to receive wage replacement than employees with more 
     education and higher salaries; and
       (B) female employees, employees from racial minority 
     groups, and younger employees are slightly less likely to 
     receive wage replacement than male employees, white 
     employees, and older employees, respectively;
       (5) in order to cope financially with taking family or 
     medical leave, of persons taking that leave without full wage 
     replacement--
       (A) 40 percent cut their leave short;
       (B) 39 percent put off paying bills;
       (C) 25 percent borrowed money; and
       (D) 9 percent obtained public assistance;
       (6) taking family or medical leave often drives employees 
     earning low wages into poverty, and 21 percent of such low-
     wage employees who take family or medical leave without full 
     wage replacement resort to public assistance;
       (7) studies document shortages in the supply of infant 
     care, and that the shortages are expected to worsen as 
     welfare reform measures are implemented; and
       (8) compared to 30 years ago, families have experienced an 
     average decrease of 22 hours per week in time that parents 
     spend with their children.

     SEC. 3. PURPOSES.

       The purposes of this Act are--
       (1) to establish a demonstration program that supports the 
     efforts of States and political subdivisions to provide 
     partial or full wage replacement, often referred to as FIRST 
     insurance, to new parents so that the new parents are able to 
     spend time with a new infant or newly adopted child, and to 
     other employees; and
       (2) to learn about the most effective mechanisms for 
     providing the wage replacement assistance.

     SEC. 4. DEFINITIONS.

       In this Act:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of Labor, acting after consultation with the Secretary of 
     Health and Human Services.
       (2) Son or daughter; state.--The terms ``son or daughter'' 
     and ``State'' have the meanings given the terms in section 
     101 of the Family and Medical Leave Act of 1993 (29 U.S.C. 
     2611).

     SEC. 5. DEMONSTRATION PROJECTS.

       (a) Grants.--The Secretary shall make grants to eligible 
     entities to pay for the Federal share of the cost of carrying 
     out projects that assist families by providing,

[[Page S8377]]

     through various mechanisms, wage replacement for eligible 
     individuals that are responding to caregiving needs resulting 
     from the birth or adoption of a son or daughter or other 
     family caregiving needs. The Secretary shall make the grants 
     for periods of 5 years.
       (b) Eligible Entities.--To be eligible to receive a grant 
     under this section, an entity shall be a State or political 
     subdivision of a State.
       (c) Use of Funds.--
       (1) In general.--An entity that receives a grant under this 
     section may use the funds made available through the grant to 
     provide partial or full wage replacement as described in 
     subsection (a) to eligible individuals--
       (A) directly;
       (B) through an insurance program, such as a State temporary 
     disability insurance program or the State unemployment 
     compensation benefit program;
       (C) through a private disability or other insurance plan, 
     or another mechanism provided by a private employer; or
       (D) through another mechanism.
       (2) Administrative costs.--No entity may use more than 10 
     percent of the total funds made available through the grant 
     during the 5-year period of the grant to pay for the 
     administrative costs relating to a project described in 
     subsection (a).
       (d) Eligible Individuals.--To be eligible to receive wage 
     replacement under subsection (a), an individual shall--
       (1) meet such eligibility criteria as the eligible entity 
     providing the wage replacement may specify in an application 
     described in subsection (e); and
       (2) be--
       (A) an individual who is taking leave, under the Family and 
     Medical Leave Act of 1993 (29 U.S.C. 2601 et seq.), other 
     Federal, State, or local law, or a private plan, for a reason 
     described in subparagraph (A) or (B) of section 102(a)(1) of 
     the Family and Medical Leave Act of 1993 (29 U.S.C. 
     2612(a)(1));
       (B) at the option of the eligible entity, an individual 
     who--
       (i) is taking leave, under that Act, other Federal, State, 
     or local law, or a private plan, for a reason described in 
     subparagraph (C) or (D) of section 102(a)(1) of the Family 
     and Medical Leave Act of 1993 (29 U.S.C. 2612(a)(1)); or
       (ii) leaves employment because the individual has elected 
     to care for a son or daughter under age 1; or
       (C) at the option of the eligible entity, an individual 
     with other characteristics specified by the eligible entity 
     in an application described in subsection (e).
       (e) Application.--To be eligible to receive a grant under 
     this section, an entity shall submit an application to the 
     Secretary, at such time, in such manner, and containing such 
     information as the Secretary may require, including, at a 
     minimum--
       (1) a plan for the project to be carried out with the 
     grant;
       (2) information demonstrating that the applicant consulted 
     representatives of employers and employees, including labor 
     organizations, in developing the plan;
       (3) estimates of the costs and benefits of the project;
       (4)(A) information on the number and type of families to be 
     covered by the project, and the extent of such coverage in 
     the area served under the grant; and
       (B) information on any criteria or characteristics that the 
     entity will use to determine whether an individual is 
     eligible for wage replacement under subsection (a), as 
     described in paragraphs (1) and (2)(C) of subsection (d);
       (5) if the project will expand on State and private systems 
     of wage replacement for eligible individuals, information on 
     the manner in which the project will expand on the systems;
       (6) information demonstrating the manner in which the wage 
     replacement assistance provided through the project will 
     assist families in which an individual takes leave as 
     described in subsection (d)(1); and
       (7) an assurance that the applicant will participate in 
     efforts to evaluate the effectiveness of the project.
       (f) Selection Criteria.--In selecting entities to receive 
     grants for projects under this section, the Secretary shall--
       (1) take into consideration--
       (A) the scope of the proposed projects;
       (B) the cost-effectiveness, feasibility, and financial 
     soundness of the proposed projects;
       (C) the extent to which the proposed projects would expand 
     access to wage replacement in response to family caregiving 
     needs, particularly for low-wage employees, in the area 
     served by the grant; and
       (D) the benefits that would be offered to families and 
     children through the proposed projects; and
       (2) to the extent feasible, select entities proposing 
     projects that utilize diverse mechanisms, including expansion 
     of State unemployment compensation benefit programs, and 
     establishment or expansion of State temporary disability 
     insurance programs, to provide the wage replacement.
       (g) Federal Share.--
       (1) In general.--The Federal share of the cost described in 
     subsection (a) shall be--
       (A) 50 percent for the first year of the grant period;
       (B) 40 percent for the second year of that period;
       (C) 30 percent for the third year of that period; and
       (D) 20 percent for each subsequent year.
       (2) Non-federal share.--The non-Federal share of the cost 
     may be in cash or in kind, fairly evaluated, including plant, 
     equipment, and services and may be provided from State, 
     local, or private sources, or Federal sources other than this 
     Act.
       (h) Supplement Not Supplant.--Funds appropriated pursuant 
     to the authority of this Act shall be used to supplement and 
     not supplant other Federal, State, and local public funds and 
     private funds expended to provide wage replacement.
       (i) Effect on Existing Rights.--Nothing in this Act shall 
     be construed to supersede, preempt, or otherwise infringe on 
     the provisions of any collective bargaining agreement or any 
     employment benefit program or plan that provides greater 
     rights to employees than the rights established under this 
     Act.

     SEC. 6. EVALUATIONS AND REPORTS.

       (a) Available funds.--The Secretary shall use not more than 
     2 percent of the funds made available under section 5 to 
     carry out this section.
       (b) Evaluations.--The Secretary shall, directly or by 
     contract, evaluate the effectiveness of projects carried out 
     with grants made under section 5, including conducting--
       (1) research relating to the projects, including research 
     comparing--
       (A) the scope of the projects, including the type of 
     insurance or other wage replacement mechanism used, the 
     method of financing used, the eligibility requirements, the 
     level of the wage replacement benefit provided (such as the 
     percentage of salary replaced), and the length of the benefit 
     provided, for the projects;
       (B) the utilization of the projects, including the 
     characteristics of individuals who benefit from the projects, 
     particularly low-wage workers, and factors that determine the 
     ability of eligible individuals to obtain wage replacement 
     through the projects; and
       (C) the costs of and savings achieved by the projects, 
     including the cost-effectiveness of the projects and their 
     benefits for children and families;
       (2) analysis of the overall need for wage replacement; and
       (3) analysis of the impact of the projects on the overall 
     availability of wage replacement.
       (c) Reports.--
       (1) Initial report.--Not later than 3 years after the 
     beginning of the grant period for the first grant made under 
     section 5, the Secretary shall prepare and submit to Congress 
     a report that contains information resulting from the 
     evaluations conducted under subsection (b).
       (2) Subsequent reports.--Not later than 4 years after the 
     beginning of that grant period, and annually thereafter, the 
     Secretary shall prepare and submit to Congress a report that 
     contains--
       (A) information resulting from the evaluations conducted 
     under subsection (b); and
       (B) usage data for the demonstration projects, for the most 
     recent year for which data are available.

     SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     Act $400,000,000 for fiscal year 2000 and such sums as may be 
     necessary for each subsequent fiscal year.

  Mr. KENNEDY. Mr. President, I am honored to join as a cosponsor of 
Senator Dodd's ``Family Income to Respond to Significant Transitions'' 
(FIRST) Insurance Demonstration Project Act. From his work on the 
Family and Medical Leave Act of 1993 to his countless efforts to 
improve the quality and accessibility of child care, Senator Dodd has 
been a tireless advocate for families and children, and I commend his 
leadership on this important new initiation.
  Millions of families have benefited from the Family and Medical Leave 
Act, but we must do more to support working families. Nearly two-thirds 
of employees cannot afford to take family or medical leave when a new 
child is born or a family member becomes ill. According to a survey by 
the National Partnership for Women and Families, 64 percent of 
Americans believe that the time pressures on working families are 
getting worse, not better. Two-thirds of women and men under the age of 
45 believe that they will need to take a family or medical leave in the 
next 10 years. But, many of these families won't be able to afford it.
  We should stop paying lip service to family values and find a way to 
help families afford family leave when they need it. This bill will 
provide grants to states and local communities to experiment with 
methods of wage replacement for workers who take family leave. States 
will use the grants for demonstration projects implementing wage 
replacement strategies to allow more employees to spend time with their 
families when family needs require it.
  Under the Family and Medical Leave Act, businesses with 50 or more 
employees must provide up to 12 weeks of unpaid leave to employees to 
care for a newborn or newly-adopted child, or to care for a child, a 
spouse, or a parent who is ill. The Act has helped millions of workers 
care for their families, but too many obstacles prevent too many

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workers from taking leave. Forty-one million people, nearly half the 
private workforce, are not protected by the law because their company 
is too small to be covered, or because they haven't worked there long 
enough to qualify for the leave.
  Others are covered and entitled to a leave, but cannot benefit from 
the Act because they cannot afford to take an unpaid leave of absence. 
Although some workers are fortunate enough to receive wage replacement 
during periods of family or medical leave, most hard-working low-wage 
earners do not receive this benefit. Low-income employees are less 
likely to receive wage replacement than more highly educated, well-paid 
employees. Women, minorities, and younger employees are less likely 
than men, white Americans, and older workers to receive wage 
replacement benefits when taking family leave.
  As a result, 40 percent employees without full wage replacement cut 
their leaves short, 39 percent put-off paying bills, 25 percent borrow 
money, and 9 percent turn to public assistance to cover their loss 
wages. Taking unpaid leave often drives low-wage earners into poverty. 
Workers who need to care for an ill family member, an elderly parent, 
or a new baby should not be plunged into poverty.
  Our bill will help families take needed leave by allowing states to 
implement alternative funding programs. For example, states may choose 
to expand state or private Temporary Disability Insurance plans to 
provide partial or full replacement of wages for those taking time off 
form work to care for a new child. States may also expand their 
Unemployment Insurance Compensation to make leave from work 
economically feasible. The FIRST Act is an important step in the right 
direction. This bill will provide states with $400 million for fiscal 
year 2000 to fund demonstration programs, assisting states which are 
already working to establish wage replacement leave programs.
  I am proud that Massachusetts is moving forward to address this 
problem. A bill to establish a Family and Employment Security Trust 
Fund has already been introduced, providing family leave replacement 
through the unemployment insurance system. Thousands of workers in 
Massachusetts will be able to care for their families without falling 
into poverty--including low-income employees living from paycheck to 
paycheck. Groups in Maryland, Vermont, and Washington are taking the 
lead with similar legislation.
  We need to put families first and this bill does that. I urge my 
colleagues to support this needed initiative.
                                 ______