France pensioner tax break cut rejected by lawmakers

French lawmakers on Thursday rejected a government plan to reduce a tax break for pensioners, a setback for efforts to cut spending and contain the country’s debt burden.

The proposal was defeated by 116 votes to 30. Its rejection undermined President Emmanuel Macron’s government’s ambition to secure 5.5 billion euros, or $6.1 billion, in pension-related savings next year.

The government had hoped to raise 1.4 billion euros by lowering the ceiling on a 10-percent tax allowance for pensioners to 3,000 euros from 4,400 euros for higher-income retirees.

France’s public debt is projected to reach 121.7 percent of GDP in 2027, while the budget deficit is expected to remain above five percent. Parliament is still due to decide on another budget measure that would limit pension increases linked to inflation.

Lawmakers have been examining the budget bill since Tuesday and have submitted several thousand amendments. A vote on the broader budget package is scheduled for October 20, though its prospects in the current form are uncertain.