Home Personal Finance Why France’s protests over the retirement age should worry Republicans

Why France’s protests over the retirement age should worry Republicans

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Massive protests swept through French cities on Thursday as more than a million people set to raise their retirement age from 62 to 64 and oppose new policies that would require workers to contribute longer to their pension schemes. The new law was a priority for President Emmanuel Macron, who used a loophole in the constitution to force changes after it became clear that Congress would reject it.

The weeks of protests in France have been mostly peaceful and led by union leaders. pile of garbagestranded on the streets by striking garbage collectors, has become a symbol of the opposition. confusion For transportation, air traffic, oil refineries, and schools.

But on Thursday, violence erupted as protesters set the front door on fire. Bordeaux City Hall Newsstands all over Paris threw smoke grenades and damaged property.the police tried to suppress them tear gas and water cannon until late at night.at least 149 police officers injured, 172 arrestedIt is not clear how many civilians were injured, and no estimate has yet been made as to the extent of the damage.

Mr Macron, who narrowly survived this week’s no-confidence vote, says he has no intention of overturning the law. TV appearance Wednesday He said he needed to convince the public that reforms were needed to save what he considered the country’s pension system to be at stake, especially given the rising life expectancy. said.but it is not clear at all current pension expenditure Out of control and making his point only adds to the anger of the protesters.

It’s hard to imagine similar mass protests erupting in the United States over raising the age at which people start receiving Social Security. May become insolvent by 2033In other words, the beneficiary could see the check decrease by 25% thereafter. France’s size and strong unions have helped unite protests, and the United States has struggled to sustain violent civil protests for decades. It is a warning to Republicans who have been misleadingly pushing social security reform as the only way out.

“In some ways it’s the same conversation, because it’s a way to cut benefits,” said Alicia Mannell, director of the Center for Retirement Studies at Boston University.

Raising the retirement age is effectively a cut in benefits

The Republican Study Committee, a group of House conservatives, Proposed their 2023 Budget Gradually raise the retirement age in the United States from 67 to 70 as life expectancy increases. Republicans sought to frame such proposals as reforms that would keep the system solvent for future generations without touching the interests of current retirees and those nearing retirement age.

There was speculation that the idea would stall the debt ceiling negotiations, but Republican House Majority Leader Kevin McCarthy said: removed the issue from the agenda However, the idea has been the subject of debate among some Republicans, including the party’s presidential candidates, following backlash from moderates within the party and relentless Democratic attacks last month.

“It’s unrealistic to say you don’t touch the entitlement. The problem is, if you’re an older person or someone nearing retirement, you don’t have to touch it. I’m talking about generations.” Republican Presidential Candidate Nikki Haley said earlier this month.

One of the most common misconceptions in the United States is about retirement age. An American can start claiming benefits as early as age 62, but under the delayed retirement credits introduced in the early 1970s, the maximum monthly benefits start at age 70. Only whenaverage American today 64 years old retirement agebut that may be partly because they don’t know that they will get a higher profit if they defer.

Also, regardless of what Republicans say, raising the retirement age further would be a cut in benefits given that retirees will receive less money in a shorter period of time.

An analysis by CBS’ Aimee Picchi found that the Republican plan would cost the average retiree three to four years of lost benefits, Minimum $65,000This is especially important given that there are other sources of post-retirement income such as pensions provided by your employer. withered over the yearsthe tax on social security benefits is gainand that Medicare Insurance fee rising.

“When you talk about raising the retirement age, you have to put air quotes on it because most people have heard it and actually heard it wrong.” The point is to cut benefits so that the wealthy don’t pay any more taxes.”

France has a more generous retirement system than the US, but Lawson argues the same Protesters in France have taxed their government over the course of recent demonstrations. Raising the retirement age would place an undue burden on low-income and working-class people without seeking other tax solutions or taking advantage of other accounts.

However, some solutions are emerging in the United States to avoid these burdens and the widespread public outrage seen in France.

There are many ideas about saving without raising the retirement age, except for Social Security.

At this point, Republicans are primarily proposing ways to reduce the amount of money paid out through Social Security, but they haven’t talked about ways to increase the amount that flows into the program.

There are a myriad of ways to do this, including withdrawing more Social Security taxes from your paycheck. The government may raise the social security tax cap. With this cap, in 2023 he will not be subject to his 6.2% Social Security payroll tax on any income over $160,200 for both workers and their employers. About 6% of Americans earn more than that amount.

Democratic Senators Bernie Sanders and Elizabeth Warren have proposed that people earning more than $250,000 pay Social Security taxes on their income. Target investment and business income to social security tax. This guarantees the survival of social security until 2046. projection By the Congressional Budget Office.

Congress could allocate general revenue to support the program, recognizing the fact that much of the Social Security fund was spent on first-generation retirees after the Great Depression, Mannell said. .

“General revenues can be invested in recognizing the ongoing burden of decisions made decades ago. I don’t think it’s going to undermine the relationship between the donations and profits of the charity,” she said.

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