Macron’s move gets a non from French citizens. What would happen with a similar proposal in the United States?
“A dog day afternoon in French politics as Macron uses ‘nuclear option’ to raise retirement age,” reported France 24 on March 16, 2023. It was perhaps the best description yet of the anarchy that has ensued since French President Emmanuel Macron took the extraordinary step of overriding parliament to raise France’s retirement age.
The general consensus — that Macron risks his political career with this action — is resounding.
“France’s Macron risks his government to raise retirement age,” wrote Sylvie Corbet and Elaine Ganley yesterday for the Associated Press.
“Macron’s risky move on pensions: a gambit too far?” asked Financial Times. “In the face of a no-confidence vote and more protests, the French president is betting he can emerge stronger.”
“You have to take your risk,” the Financial Times quoted one of Macron’s favorite catchphrases, adding, “The French president did just that on Thursday as he staked the future of his second term on ramming through his unpopular plan to raise the retirement age without a vote in parliament.”
“When his prime minister failed to secure a majority for the reform, Macron chose to invoke a special constitutional power, known as article 49.3, to effectively override lawmakers,” wrote FT in a tone of wonder.
“Violent protests in France over Macron’s retirement age push,” reported the Associated Press later in the day.
“France’s streets are filled with garbage and fury,” expanded NBC News on March 17, 2023. “Here’s why: Protestors across the country are angry about President Emmanuel Macron’s long-promised plans to raise the national retirement age from 62 to 64.”
Macron has come under increasing pressure as the protests and strikes have continued. He went from tweeting about saving the Seine on March 13 to expressing support for Moldova on March 17. In between, a conspicuous lack of reference to raising the retirement age.
“On the phone with President Maia Sandu, I expressed France’s support for Moldova, its commitment to accompany it in its European vocation, to deal with attempts at destabilization as well as the consequences of the war in Ukraine,” tweeted President Macron on March 17, 2023. As the comments showed, the tweet may have been ill-timed.
But it isn’t as if Emmanuel Macron wasn’t prepared for a fight on this issue.
“The reform I want to carry out is to increase the legal retirement age gradually…to bring the legal age up to 65 years,” Macron promised on the campaign trail in 2022.
Macron has long promised to raise the French retirement age as part of his broader agenda to reform the country’s pension system. The reform is aimed at ensuring the financial sustainability of the pension system in the face of demographic challenges and longer life expectancies.
Before this move, France’s retirement age was 62 years — one of the lowest in the European Union. However, the country’s pension system is facing a significant funding gap, in part due to an aging population. As a result, the government has projected that the system will be running a deficit by 2025.
The reform has been met with opposition from labor unions and some sectors of the public who argue that it will disproportionately affect workers in physically demanding jobs and be unfair to those who have already paid into the system with the expectation of retiring at age 62.
However, Macron and his supporters argue that the reform is necessary to ensure the long-term financial sustainability of the pension system and to address the challenges posed by an aging population.
“You have to learn to fight for things, to bear the burden, and have a life which does not in any way correspond to other people’s lives,” Macron once said.
It is a fight U.S. lawmakers may someday be facing themselves.
Like France’s retirement entitlement program, the U.S. Social Security system is considered by most accountings to be insolvent.
The program is facing so many financial challenges, it may not be able to meet its obligations to pay future benefits to retirees and disabled individuals in 10 years.
The social security system in the United States is primarily funded through payroll taxes collected from workers and employers, which are then used to pay benefits to retired, disabled, and surviving beneficiaries. However, the number of workers contributing to the system has been decreasing relative to the number of retirees, which has led to a funding gap.
According to projections, the program’s trust funds are expected to be depleted in a decade. If no action is taken to address the funding shortfall, the program will only be able to pay out benefits at a reduced level. Significant changes will need to be made to ensure its long-term sustainability.
Who will be willing to tackle those changes?
There are several proposed ways to fix social security insolvency, including:
Increase payroll taxes
This could involve raising the percentage of earnings subject to the payroll tax or increasing the overall payroll tax rate.
Increase the retirement age
Increasing the retirement age could involve gradually raising the age at which individuals are eligible to receive full benefits or tying the retirement age to life expectancy.
Another proposal is to means-test social security benefits, which would reduce or eliminate benefits for higher-income individuals. This could reduce the overall cost of the program and could help extend its solvency.
Another option is to reduce social security benefits. This could involve reducing benefits for higher-income individuals or reducing the overall level of benefits for all recipients.
Invest social security funds in private accounts
Some proposals suggest investing social security funds in private accounts that would be managed by individuals, rather than the government. The idea is that individuals could invest their funds more effectively and potentially earn higher returns, which could help extend the solvency of the program.
Another proposal is to increase the number of immigrants entering the country, which would increase the number of workers paying into the social security system and help offset the cost of benefits for retirees.
Anyone perusing the above list must be struck, as should any lawmaker, by how unpopular most are likely to be with voters. What politician would, like Macron, be so willing to fall on the sword of electoral politics?
In particular, by overriding parliament, Macron has singled himself out in the mind of French voters as the sole lawmaker responsible for their malaise.
Will Macron’s career survive?
American politicians considering ways to save Social Security will most certainly be paying close attention.
(contributing writer, Brooke Bell)