What the US could do about Social Security to avoid the same fate as France


(WASHINGTON) — With strikes raging throughout France in response to a push to raise the nation’s retirement age, government officials across the Atlantic Ocean may want to take steps to avoid similar chaos in the event that Social Security becomes insolvent.

Last-ditch talks between Prime Minister Elisabeth Borne and leaders of France’s largest trade unions faltered on Wednesday. Union representatives emerged after less than an hour deeming the meeting a “failure” and calling on the public to join Thursday’s strike.

Millions have taken to the streets in recent months in opposition to the pension reform, with protests at times shutting down schools, public transit and iconic cultural attractions like the Eiffel Tower and the Louvre. Mounds of garbage piled up on the sidewalks and were set ablaze. Violent clashes have been documented between demonstrators and police.

Frédéric Souillot, the secretary general of the Force Ouvrière trade union, warned Wednesday they were “more determined than ever” ahead of the new wave of protests.

But France is not the only nation grappling with a financial dilemma. The United States will soon have to address the holes threatening to sink its own retirement system.

Social Security, the popular program on which 67 million Americans rely for monthly payments, faces long-term solvency issues that could result in benefit reductions within the next decade. U.S. lawmakers will soon have to act on Social Security, despite its status as the “third rail” in American politics — as in “touch it at your own peril.”

The trust fund that pays retirees is estimated to run dry by 2033, a year earlier than previously predicted, according to a report released last week from its board of trustees. If no solution is reached by then, the program would only be able to pay out 77% of scheduled benefits.

“We face the same demographic challenges here that France is facing,” Richard Johnson, the director of the Urban Institute’s Program on Retirement Policy, told ABC News. “There will be more retirees per worker in the future than we have today. That’s the challenge.”

What can America learn from France’s upheaval? Here are steps experts say U.S. officials can take in an effort to avoid the same fate.

Negotiate with the labor movement

France’s retirement age hike incensed the nation’s labor movement, which argued the measure unfairly burdened blue-collar workers in physically demanding jobs. The move is opposed by younger and older citizens alike.

French President Emmanuel Macron argued the new law — which raises the minimum retirement age from 62 to 64 — was necessary for the survival of the country’s pension system. He pushed the deeply unpopular measure forward by shunning Parliament and invoking a special constitutional power.

Jean Garrigues, a leading French historian, said Macron made two “bad mistakes” during the ordeal: not negotiating with the labor movement and using what many see as an undemocratic tool to get the measure adopted.

“A lot of people accuse Emmanuel Macron of being responsible for all this violence,” Garrigues told ABC News.

Strive for fairness in readjusting the system

Both France and the U.S. have pay-as-you go systems that are strained by the collapsing ratio of working people to retirees. President Joe Biden and Republicans have clashed several times over how to address the disparate numbers of people in different generations.

Some Republicans have floated raising the full retirement age to 70 and making benefit changes to high-earning Americans to bring the system into balance. Democrats have generally proposed expanding benefits and raising taxes on the wealthy.

Rich Fiesta, the executive director of the Alliance for Retired Americans, said he would “urge caution” to lawmakers who want to raise the full retirement age in the U.S. beyond 67.

“That’s the one thing that is universally not well regarded by the American public,” he said.

Macron’s critics have argued the funding for pensions could’ve come from another source, such as tax increases, without forcing people to retire later.

“Part of the protests in France is this idea of how we should be distributing the pain of adjusting the retirement system,” Johnson said.

That idea will likely be a key point of debate as the U.S. continues to debate Social Security.

“When we look at the solution that the French have come up with, which is increasing the retirement age, there are some questions about the fairness of doing that,” Johnson said. He noted those in physically demanding jobs may not be able to work longer and older people who lose their jobs may have trouble getting reemployed.

“Is that the most fair kind of change that we should make to Social Security? Should we ask wealthier people to pay more into the system? That’s something that the French haven’t done, and we’re seeing street protests.”

Make changes gradually

The last time the U.S. increased the retirement age for Social Security was in 1983, but the change happened gradually over several decades.

By contrast, France’s new retirement age will be fully implemented by 2030 — just seven years away.

“You want to give people time to adjust,” Johnson said. “It’s important to start thinking about change long before the system is in crisis. What we’re seeing in France is the importance of planning ahead, so we don’t have to make quick changes.”

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