Assembly rejects 2027 social security budget

Deputies in the National Assembly rejected the 2027 social security budget by near-unanimity, sending the text directly to the Senate. On the side of the State Budget, deputies interrupted their debates in first reading after a week of discussions, without achieving any compromise. They must resume on Tuesday, October 27.

Uncertain future for two budget texts

The outcome of these two texts seems very uncertain, in a context of social mobilization and a presidential election. These two bills, clearly distinct, follow their own procedures.

Finance bill outlines state budget

The finance bill (PLF) is equivalent to the state budget. This text is composed of two parts: revenues, which come from the various taxes and duties paid by households and companies, and expenditures, i.e., the means the state allocates to its various missions, such as education, defense, or justice.

Complex process for preparing the finance bill

Its preparation constitutes each year a true marathon. From January until autumn, the Prime Minister and Bercy set priorities, establish forecasts for the following year, and distribute the trade-offs between the different ministries. Once the text is established, it is submitted to the High Council of Public Finances, then to the Council of State, and finally presented in the cabinet meeting.

Challenges in the Assembly

The hardest part then begins at the Assembly, where the copy must be deposited by the first Tuesday of October at the latest. From this date, deputies and senators have 70 days to discuss the text, reach a final version, and adopt it. Last year, the PLF having not been adopted in time after its rejection in December by a joint committee, the government opted for a special law.

Legal alternatives for the government

This solution allows the executive to continue collecting existing taxes based on the previous year's budget and to authorize borrowing on the markets for the state. Two other options are also available to the government in case of deadlock: the use of Article 49-3, unless a motion of censure is passed by a majority, and ordinances.

Legal expert emphasizes transparency

The PLF is distinguished by its "binding scope in relation to the principle of consent to taxation, which is democratic and inscribed in our Declaration of the Rights of Man," explains Anne-Charlène Bezzina, associate professor of public law at the University of Rouen and Sciences Po. "The Parliament must authorize all euros that enter the state's coffers for transparency reasons," she continues.

Social security financing bill focuses on spending

The social security financing bill (PLFSS) sets the expenditure objectives of the social security system, depending on the revenue forecasts. This text was born in 1996 from the will of the parliamentarians "to have a more precise view of the evolution of social spending to better manage public funds," specifies Thibaud Mulier, associate professor of public law at the University of Paris Nanterre.

PLFSS lacks binding limits

Unlike the PLF, it does not have a binding scope, notes Thibaud Mulier. "It is a control tool to avoid overruns but there is no spending ceiling as for the state budget." It also establishes a multiannual trajectory over four years.

Distinct roles for PLF and PLFSS

There are therefore two texts because the state budget, which finances notably the school, justice, and defense, is distinct from the social security accounts, which finances notably pensions, care, and family benefits. The PLF authorizes the state's revenues and expenditures, while the PLFSS provides for the revenues and sets the expenditure objectives of the social security system.

Challenges in finalizing texts

Facing the budgetary imbalance, and with a relative majority, "many concessions will have to be made," to hope to see these two texts finalized this year again, estimates Anne-Charlène Bezzina.

Past cooperation unlikely to repeat

Last year, the executive was able to count on the Socialist Party (PS) with which it had negotiated a no-censure pact, in exchange for a suspension of the pension reform, for the adoption of the PLFSS. According to Thibaud Mulier, the repetition of such a scenario seems unlikely a few months before the presidential election: "The government could negotiate more easily with a pivotal parliamentary group, but I doubt the PS would risk it this year."