Despite the budget crisis, according to Labor Minister Heil, the adjustment of the citizens’ benefit should come. Anything else is incompatible with the constitution. Welfare associations were also horrified by the austerity demands of the FDP and the Union.
There is a huge hole in the budget – 60 billion euros are missing according to the Federal Constitutional Court’s ruling. Now we have to save money. But where? If the FDP and the Union have their way, the adjustment of citizens’ money should, among other things, be canceled. But this met with vehement criticism from Federal Labor Minister Hubertus Heil (SPD) and welfare associations.
It is morally irresponsible and incompatible with the constitution to deny those entitled to citizen benefit an adjustment of the standard rates, said Heil.
“Germany is and remains a social, constitutional state”
Citizens’ money puts people into work and at the same time secures the existence of people in need, emphasized the Labor Minister. These included single parents, children and young people, sick people, people with disabilities and pensioners. In view of the sharp rise in electricity and food prices, they are dependent on additional services.
“Germany is and remains a social constitutional state. Decency, solidarity and charity are a strength of our society,” said the SPD politician. That’s why the adjustment will take place, the minister assured.
“Security of existence according to cash situation violates the welfare state”
The welfare association Diakonie argued with the constitution. Diakonie President Ulrich Lilie said that securing livelihoods based on cash flow violates the basic principles of the welfare state and constitutional law.
There are many people who, despite massive efforts, have not managed to get out of poverty. This is also due to the low-wage sector, in which people often work full-time and still don’t have enough to live on.
Caritas argued similarly. The organization’s president, Eva Maria Welskop-Deffaa, said it would be “fatal” to save mainly on social spending after the Karlsruhe ruling. Services such as early help, daycare centers and youth social work are investments in the future, she said in an interview with the “Editorial Network Germany”.
Parity: increase only compensates for inflation
According to the Joint Association, the planned increase in citizens’ allowance only compensates for inflation and as such is even too low. According to calculations by the association’s research center, the standard rate would have to be raised to at least 813 euros for single adults in order to protect against poverty.
In the association’s opinion, using the currently flattening inflation rate as a justification for cuts in citizens’ benefits misses the point. The general price level has risen by 13 percent since 2021, and food prices have risen by 27 percent in a two-year comparison. In real terms and in terms of purchasing power, people would have less in their wallets than before.
Habeck consultants recommend reforming the debt brake
How much can be raised for social benefits also depends on the debt brake. According to a report, advisors to Federal Economics Minister Robert Habeck are in favor of far-reaching adjustments to the debt brake. The current rules create “false incentives” that cause the state to invest too little, according to a report by the ministry’s scientific advisory board, according to the “Handelsblatt”. Accordingly, the experts are calling for a realignment of financial policy with the possibility of higher debt for investments.
The debt brake in the Basic Law limits permissible new government debt to 0.35 percent of gross domestic product. The basic idea is not to leave future generations with too much debt. The regulation has recently come under increasing criticism because it prevents investments.
According to Handelsblatt, Habeck’s advisors are now calling for the restriction on state consumer spending such as social transfers to be maintained, but to allow the taking on of debt for future investments. This eliminates “distortions” in politics to the detriment of younger generations due to a lack of investment.
Scholz: “Constructive” conversations about the budget
It is still unclear when the 2024 budget will be decided. They are “working intensively,” said Chancellor Olaf Scholz (SPD). “As a participant in the discussions, I think things are going very constructively, with the will and intention to reach an agreement quickly and quickly.”
Scholz continued that he was very confident that progress could be made quickly and that security could be offered for the future. The current situation, that the budget still needs to be urgently discussed at the end of the year, also always exists after federal elections. “We are now in the process of solving this more quickly and very, very quickly so that there is clarity very quickly. And we will tell you when we are finished.”