The examination of the 2025 state budget project resumes in the Senate after being paused due to the censure of the Barnier government. The Senate has approved the revenue section and is set to review expenditures. A final vote is expected on January 23, with a potential mixed joint committee to facilitate compromise. Meanwhile, the Social Security financing bill faces challenges but remains viable. Legislative changes are limited due to existing rules, leading to anticipated corrective finance bills throughout the year.
Resumption of the 2025 State Budget Examination in the Senate
Current Status of the Budget
Following the censure of the Barnier government in December, the examination of the 2025 state budget project, known as the finance bill (PLF), will continue in the Senate where it previously paused in Parliament.
To expedite the process, the government has chosen to proceed from the existing budget proposal rather than starting anew, which would have extended the debate by several weeks.
Currently, the National Assembly has rejected the PLF during its first reading, while the Senate has approved the revenue section and is set to examine the expenditure portion this week. The upper house has several budget missions lined up, including discussions on Overseas (Wednesday), agriculture (Friday), and defense (Saturday).
Timeline for Approval
The final vote on the entire state budget project is slated for January 23 in the Senate during its first reading. Following this, the government may convene a mixed joint committee (CMP) composed of seven senators and seven deputies, tasked with proposing modifications for a compromise text.
If successful, this consensus would be presented for a final vote in both chambers. However, the National Assembly might revisit the government’s potential use of article 49.3, which allows a law to pass without a formal vote, leading to a possible motion of censure.
Bringing together a CMP could significantly accelerate the process. According to Yaël Braun-Pivet, the President of the National Assembly, if both deputies and senators can come to an agreement, the budget could be finalized by late January or early February.
If the CMP fails to reach a conclusion or if the government opts not to convene it soon, the budget proposal will have to go through a comprehensive review in both chambers again, which would require considerable time.
The Social Security Budget Status
In contrast, the Social Security financing bill (PLFSS) faces a different set of challenges, particularly regarding employer contributions and hospital funding.
This bill was linked to the downfall of former Prime Minister Michel Barnier due to the use of article 49.3 to push through the CMP’s conclusions.
Despite this setback, the PLFSS remains viable. After a brief review in the Senate on January 23, it can continue through a new reading in the National Assembly and then return to the Senate.
Reports indicate that the government intends to resume the examination of the PLFSS in the Assembly as early as January 29, following the version adopted by the Senate.
Limitations on Legislative Changes
Although François Bayrou and his ministers, including Eric Lombard and Amélie de Montchalin, are engaged in discussions with opposition members to navigate these financial proposals, their options are restricted.
Introducing new measures is challenging as it must relate directly to the provisions still under consideration. This constraint, known as the ‘funnel’ rule, makes it difficult to propose any new revenue measures, according to Eric Coquerel, the rebellious president of the Finance Committee of the Assembly. He anticipates potential cuts in spending, predicting a budget that could be less favorable than that of the Barnier government.
Moreover, ministers and parliamentarians must adhere to the principle of ‘non-retroactivity’ in tax matters, which limits their ability to alter the rules governing specific taxes or loopholes.
Given these constraints, many legislators expect that corrective finance bills will be proposed throughout the year to address new measures concerning both the state and Social Security budgets, leading to extended debates on these financial issues.