Mario Czaja is still cautious on Monday morning. “The CDU-governed countries will in all likelihood abstain today. That’s how they signaled it,” said the CDU general secretary on ZDF. Then the federal government will not receive the approval of the state chamber, which it needs to enforce the citizen’s income. “And that’s why the conciliation committee will almost certainly have to come.”
That’s how it happens. Shortly after twelve o’clock it is clear: the rejection front of the federal states led by the Union and of Baden-Württemberg, where the CDU is a junior partner, is standing. This means that the planned citizens’ allowance, a central reform project of the traffic light coalition, has been stopped for the time being. The government alliance must now come to an agreement with the Union if the project is to become a legal reality. The coalition would have to get at least one larger state with government participation from the Union on its side in order to achieve the necessary majority in the state chamber, for example North Rhine-Westphalia or Baden-Württemberg.
The “wrong law at the wrong time”
There is a certain range of willingness to compromise among the Union countries, which was evident on Monday in the Bundesrat. Bavaria’s representative, Minister of State Florian Herrmann, condemned citizen income as the “wrong law at the wrong time” and said it was fundamentally “socially unbalanced”. Herrmann refrained from proposals for an amicable settlement.
The Baden-Württemberg Economics and Labor Minister Nicole Hoffmeister-Kraut (CDU), who governs together with the Greens, agreed to parts of the project, such as greater support for training and further education for the unemployed. You have to ask yourself “how we can shape the basic income together,” she said in the direction of the traffic light coalition.
Hoffmeister-Kraut outlined the points where the countries participating in the Union are demanding changes. First of all, this is the ability to spare. Here, the traffic light plans provide that recipients of citizen’s income do not have to use a considerable fortune for their livelihood during the so-called waiting period of two years. This means that they can receive full citizenship money even though they have considerable cash or comparable assets. For example, a family of four should leave 150,000 euros untouched, they should also be able to live in their own house and keep their cars.
The traffic light coalition argues that help recipients could concentrate on looking for a new job or on training or further education. For the Union, on the other hand, the exemption limits are far too high. You have to make sure that “only those who really need help are helped,” said Hoffmeister-Kraut.
Union countries want more money
A second point concerns the sanctions against recipients of help who miss appointments at the job center, who reject jobs offered or who discontinue measures such as further training courses. According to the draft law, the sanctions should be relaxed. In the first six months, in the so-called period of trust, a maximum of ten percent of the fine should only be threatened for repeated missed appointments, but after that sanctions of up to 30 percent of the standard rate are possible. A judgment of the Federal Constitutional Court of 2019 basically does not allow more.
Hoffmeister-Kraut rejects the trust period, the system needs “willingness to cooperate”. The Union countered this with “commitment and clear boundaries,” she said. Translated, this means: If the Union has its way, more sanctions against those who are in default of assistance, for whom more generous regulations have been introduced, must be possible from the start – similar to the time before the corona pandemic.
Third, the Union countries are demanding more money from the federal government. This is necessary for the preparation and implementation of the citizens’ income, said Hoffmeister-Kraut. The comprehensive reform plans are likely to lead to some effort in the job centers, staff councils of the authorities have already warned in a fire letter against overburdening the employees. There are also higher costs, for example there should be a bonus of 150 euros per month if someone catches up on vocational training. Overall, the Federal Court of Auditors puts the additional costs in the first year alone at around five billion euros.
The Conciliation Committee has to work quickly
A possible agreement between the traffic light coalition and the Union must now take place under time pressure. The job centers need time to adapt to the new legal situation. The head of the Federal Employment Agency, Andrea Nahles, has already called for an agreement “in November” if the reform is to take effect on January 1st.
There are already talks with the Union side, according to government circles. According to Minister of Labor Heil, the mediation committee will meet for the first time next week. According to government sources, the committee will meet for the first time on Wednesday next week. On the SPD side, it is to be led by Manuela Schwesig, the Prime Minister of Mecklenburg-Western Pomerania. The committee consists of 32 members, 16 each from the Bundestag and the Bundesrat. If the Mediation Committee reaches an agreement, the draft law in its new version must be passed again by the Bundestag and then also by the Bundesrat.
Failure to reach an agreement could have serious consequences. The legislative package also includes higher payments for those who need help, for example, single people should receive 53 euros more per month. In the event of a failure, these could be absent for the time being. In addition, the more generous regulations for the Corona period would expire, for example for the protective assets. The Mediation Committee will probably only have the first meeting on Wednesday next week to find a compromise. Just two days later, on November 25th, is the last regular meeting of the Federal Council this year, in which the Citizens Income Act could be passed.