A looming censure vote could impact the 2025 Social Security budget, raising uncertainties for retirees regarding pension adjustments. Without an approved budget, the proposed two-step pension increase may be dismissed. Legal experts note that if the censure passes, the current financing bill would be rejected, complicating future legislative efforts. Despite potential adjustments based on inflation, experts caution that regulatory complexities could change outcomes for retirees, leaving the situation precarious as the deadline approaches.
The Upcoming Censure Vote and Its Implications for Retirees
The government may face censure as soon as Wednesday regarding the legislation surrounding the “half inflation” adjustment and the two-step increase in basic pensions scheduled for 2025. This raises concerns about the fate of retirees, especially if there is no approved Social Security budget for 2025. The intricacies of this unprecedented legislative scenario have left even legal experts uncertain about the outcome.
What to Expect from the Social Security Budget Vote
The government is under pressure due to the looming threat of censure amidst the finance bill discussions, a critical point in the ongoing media and political discourse with the opposition. According to the parliamentary schedule, the Social Security budget is the first major opportunity for a vote, with the possibility of invoking Article 49.3 as early as Monday, December 2, and a potential censure vote on Wednesday, December 4.
If censure is passed, the current Social Security financing bill (PLFSS 2025), which includes the two-step pension increase provisions, would be effectively dismissed.
Contemplating the Consequences of Censure on the Social Security Budget
The situation is intricate. In the event of a censure vote, the PLFSS would be deemed rejected by the National Assembly, as explained by Mélody Mock-Gruet, a public law expert from Sciences Po Paris. Although a resigning government cannot introduce new bills, it may still utilize the “shuttle” process: the Senate’s version of the PLFSS could return to the Assembly for a second reading. However, time constraints are a significant concern, as the 50-day deadline would fall on December 5, complicating matters further. In this context, the government might resort to issuing ordinances.
This unprecedented scenario of utilizing ordinances on a previously dismissed bill raises eyebrows. Mock-Gruet emphasizes that such a process has never occurred with a standard government, let alone a resigning one. Additionally, these ordinances would hold regulatory rather than legislative power, meaning only the Council of State would oversee them, not the Constitutional Council. Hence, the government could potentially issue ordinances and the Council of State would review them retrospectively.
Is a Social Security Budget Essential for 2025?
Surprisingly, the answer is yes. As counterintuitive as it might seem, Vincent Dussart, a professor of public law at the University of Toulouse Capitole, clarifies that the PLFSS is not strictly a budget. It does not authorize expenditures but sets objectives, particularly through the National Objective for Health Insurance Expenditures (Ondam). Due to the provisions in the Constitution and the organic law concerning finance laws, there is a pathway for a special emergency law if a finance law is absent. However, no such provision exists for the PLFSS, leading to a potential scenario without an officially sanctioned PLFSS.
If this were to occur, one might wonder what the pension increase would be on January 1, 2025. This situation remains speculative, and experts in constitutional and public finance law recognize the uncertainties involved. Nevertheless, should censure on the PLFSS occur, the Social Security Code stipulates that benefits are adjusted based on the average annual change in consumer prices, excluding tobacco, as calculated by INSEE. With the inflation rate confirmed at 2.2% for October 2024, this figure would apply by default, resulting in a pension increase that the government previously deemed overly generous.
Dussart believes that the increase would indeed be 2.2%, as dictated by the Social Security Code. However, he warns of the unprecedented nature of this situation and the potential for regulatory complexities that could alter this “pleasant surprise” for retirees. The unfolding budgetary saga is far from its conclusion.