As American politicians accuse one another of being the biggest threat to Social Security, several countries around the world are pondering whether to raise their retirement age to resolve future solvency concerns. Risking political backlash, President Emmanuel Macron has decided to raise the French retirement age from 62 to 64.
Macron was worried that France’s parliament would not approve the fiercely-contested bill to do so and thus opted to push the legislation through Thursday without a full parliamentary vote. Other nations considering raising their retirement age include China and the United Kingdom.
“My interest would have been to go to a vote, but I consider that at the present time the financial and economic risks are too great. One cannot play with the future of the country,” Macron told government ministers, as quoted by the New York Times.
Since taking office in 2017, Macron has weathered political challenges like the Yellow Vest movement. He is risking backlash again by raising the retirement age. The confrontation over the entitlement has already lasted for more than two months, and Macron decided it would be a different risk not to make this move.
The legality of Macron’s action is not in question. The government used Article 49.3 of the French constitution, which allows certain bills to be passed without a vote, as the Times reported. Opposition lawmakers have promised to initiate a no-confidence motion that, if passed, would see the government forced out of office and the retirement bill rejected. However, observers say such a scenario is unlikely.
For Macron, this is just the policy result of a social reality: Fewer active workers pay the pensions of a growing number of retirees, who live longer.
Countries throughout the globe are facing the same problem.
In the U.S., it appears there is bipartisan consensus at the moment that cuts to Social Security, politician-driven or automatic, should be avoided.
Some have, however, mooted the idea of raising the retirement age for younger generations. Former South Carolina governor and Republican presidential candidate Nikki Haley suggested last week that the retirement age for workers in their 20s ought to be raised.
“It is unrealistic to say you’re not going to touch entitlements. The thing is you don’t have to touch it for seniors and anybody near retirement. You’re talking about the new generation, like my kids coming up,” Haley said during an event in Council Bluffs, Iowa.
Mike Pence is another Republican politician, widely expected to declare his presidential candidacy shortly, who has said reforms of entitlements must be on the table.
Meanwhile, former president Donald Trump is planning to use entitlement reform “as a bludgeon” against declared and possible competitors, including Haley, Pence, and Florida governor Ron DeSantis, the last of whom has supported raising the retirement age in the past but has since backtracked.
Senator Mitt Romney recently asserted there are no elected officials — Republican or Democratic — who want to touch Social Security and Medicare. Experts, however, agree that even if you don’t touch entitlements for current retirees, raising the retirement age for younger generations would constitute a benefit cut.
“If we define old age, we can reduce the number of older people who we have to support,” said Richard Johnson, a senior fellow and director of the program on retirement policy at the nonprofit Urban Institute, to MarketWatch. For Johnson and others, an older retirement age is essentially a benefit cut because it would affect how much beneficiaries receive and whether they claim early or at their full retirement age.
Age 65 was the original full retirement age for beneficiaries of Social Security when the program was first created in the 1930s. The full retirement age hasn’t been changed since 1983, when amendments to the law increased the retirement age gradually from age 65 to 67, based on an individual’s date of birth.
Proponents of raising the age say it would help resolve the entitlement’s expected solvency problems. The Congressional Budget Office released a report last month projecting that Social Security’s funds will run a shortfall in 2032, sooner than previously expected, forcing automatic cuts of over 20 percent on retirees’ benefits.