This week is critical for public finances as the National Assembly prepares to vote on the revenue section of the 2025 State budget. Significant changes have been made since the initial proposal, with the left securing additional revenue and eliminating key taxes. If rejected, the proposal returns to the Senate, which holds a majority and is ready for discussions. Upcoming challenges include the Social Security budget, with key dates for votes approaching.
Crucial Week for Public Finances in Parliament
This week is pivotal for public finances as the National Assembly gears up for a vote on Tuesday regarding the “revenue” segment of the State budget for 2025. A potential rejection is on the table, with the Senate, a partner to the Barnier government, poised to take over the discussions as early as Wednesday.
Following extensive debates at the Palais Bourbon, the finance bill is approaching its concluding phase. Deputies are expected to cast their votes in a significant session around 4:30 PM on Tuesday, focusing on the revenue-oriented portion of the State budget.
However, the version slated for voting has undergone substantial changes since Michel Barnier’s initial proposal in early October. The opposition, particularly from the left, has succeeded in securing additional billions in revenue, while several key measures—including the car tax, dividend tax, and electricity surtax—have been scrapped.
As a result, this first part has been deemed “NFP-compatible” by Eric Coquerel, the chairman of the Finance Committee (LFI). While the left coalition is preparing to support the vote, the government factions (LR-macronists) are expressing outrage over what they term “fiscal nonsense.”
In theory, Barnier’s coalition holds a numerical advantage over the New Popular Front, increasing the likelihood of a rejection if they can mobilize effectively in the hemicycle, especially since deputies can vote on behalf of their absent colleagues. This scenario remains possible even if the National Rally opts to abstain at the last moment.
If the revenue proposal is rejected, it will revert to the Senate in its original form. Conversely, if approved, the National Assembly will swiftly address the “expenditure” component of the State budget, with a deadline set for November 21. At this juncture, the government has no intention of invoking article 49.3, preferring to allow the debates to unfold organically, as indicated by a minister.
Senate Readies for Budget Discussions
Just a stone’s throw from the Palais Bourbon, the Senate is eagerly anticipating its turn to discuss the budget. On Wednesday, the Finance Committee will evaluate the same “revenue” section.
With nearly 250 senators out of 348, including roughly 130 from the Les Républicains group, Michel Barnier commands a significant majority in the upper house. They are prepared to exert their influence.
“We believe the Senate will play a more prominent role in this debate. It is crucial for us to demonstrate that bicameralism serves a valuable purpose,” asserts Jean-François Husson (LR), the general rapporteur of the budget. He aims to “reestablish a framework” concerning the various measures passed in the Assembly, all while promising to achieve “several billion in savings.”
A minister expressed confidence in the Senate’s approach: “In this chamber, we take our time and engage in more consensual, negotiated dialogue.” However, challenges may arise regarding budget allocations for local authorities, which the government has proposed to cut by at least five billion, a figure that local officials argue is even higher.
Upcoming Challenges: The Social Security Budget
Amid this busy budgetary season, various legislative texts are accumulating. The draft law concerning the financing of Social Security is still under consideration.
Due to the deputies’ failure to vote before constitutional deadlines, the Senate will now assume responsibility for this text. The Social Affairs Committee is scheduled to review it on Wednesday, with several pressing issues on the agenda, including waiting days in public service, the postponement of pension indexation to inflation, and an impending increase in employer contributions.
Looking Ahead: Key Dates and Processes
Parliament has a full agenda ahead. The National Assembly must complete its first reading of the State budget by November 21 at the latest, unless the revenue portion is rejected on Tuesday.
Following this, the Senate will examine the Social Security budget from November 18 to 23 (with a solemn vote on the 26), and the State budget from November 25 to December 12.
For both legislative texts, a joint committee composed of deputies and senators will be convened to negotiate a compromise version, which will then be presented for a final vote in both chambers… potentially invoking article 49.3 in the Assembly.