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      France’s Battle Over Retirement

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      Will Reid, Mooj Zadie and Paige Cowett and Diane Wong and Listen and follow The DailyApple Podcasts | Spotify | Stitcher | Amazon MusicThis episode contains strong languageMillions of people have taken to the streets in France to protest a government effort to raise the retirement age to 64, from 62, bringing the country more in line with its European neighbors.Today, as Parliament holds a key vote on the proposal, we look into why the issue has hit such a nerve in French society.On today’s episodeRoger Cohen, the Paris bureau chief for The New York Times.A rally in Paris against the government’s plans. The main banner in front translates as “Retirement reform: No to working longer!”Yoan Valat/EPA, via ShutterstockBackground readingAfter large protests, all eyes were on the French Parliament on Thursday as it prepared to vote on the measure to increase the retirement age by two years.Here are some of the reasons so many people in France are protesting the proposals.There are a lot of ways to listen to The Daily. Here’s how.We aim to make transcripts available the next workday after an episode’s publication. You can find them at the top of the page.Roger Cohen More

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      What’s In (and Not In) the $1.7 Trillion Spending Bill

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      A big boost for the military, more aid for Ukraine, a preference for the lobster industry over whales and an overhaul of the Electoral Count Act are among the provisions in the 4,155-page bill lawmakers expect to pass this week.WASHINGTON — Billions of dollars in emergency aid to war-torn Ukraine and communities ravaged by natural disasters. A bipartisan proposal to overhaul the archaic law at the heart of former President Donald J. Trump’s effort to overturn the 2020 election. And a divisive oceanic policy that will change federal protections for whales in an effort to protect the lobster industry in Maine.In compiling the roughly $1.7 trillion catchall spending package that will keep the government open through September, lawmakers inserted several new funding and legislative proposals to ensure their priorities and policies become law before the end of the year.It includes funding that will guarantee the enactment of policies first authorized in bipartisan legislation approved earlier in this Congress, including money for innovation hubs established in the semiconductor manufacturing law and projects in the infrastructure law. The package also includes a round of earmarks, rebranded as community project funding, that allow lawmakers to redirect funds to specific projects in their states and districts.Here is a look at some of the provisions that would go into effect if enacted.Military spending is the big winner.The Defense Department would see an extraordinary surge in spending when adding its regular 2023 fiscal year budget together with additional funds being allocated to help respond to the war in Ukraine.All together, half of the $1.7 trillion in funding included in the package goes to defense, or a total of $858 billion. It comes after lawmakers bucked a request from President Biden and approved a substantial increase in the annual defense policy bill passed this month.The 2023 budget just for the Defense Department would total $797.6 billion in discretionary spending — a 10 percent increase over last year’s budget — representing an extra $69.3 billion in funds for the Pentagon, which is $36.1 billion above the president’s budget request.Sprinkled throughout the spending bill are hundreds of high-ticket add-ons that Congress wants to make to the president’s original Defense Department budget, such as an additional $17.2 billion for procurement that the Pentagon can largely distribute to military contractors to buy new ships, airplanes, missile systems and other equipment. The overall Pentagon procurement budget with these additional funds would be $162 billion.One of the biggest chunks of that extra money is for shipbuilding — an extra $4 billion that brings the Navy’s overall shipbuilding budget to $31.96 billion. That will allow it to buy 11 new ships, including three guided missile destroyers and two attack submarines.But that is just the start. There is $8.5 billion to buy 61 F-35 fighter jets made by Lockheed Martin and another $2.5 billion to buy 15 of Boeing’s new aerial refueling planes known as KC-46 tankers.There is also an extra $27.9 billion to help cover Defense Department costs associated with the war in Ukraine, as part of an emergency aid package to the country. That includes an extra $11.88 billion to replenish U.S. stocks of equipment sent to Ukraine — money that again will largely be used to purchase products from military contractors. That supplemental appropriation also includes $9 billion to assist Ukraine with training, equipment and weapons, as well as an extra $6.98 billion to cover U.S. military operations in Europe.— Eric Lipton and John IsmayMaking it easier (for some) to save for retirement.The package also includes a collection of new rules aimed at helping Americans save for retirement. The bill would require employers to automatically enroll eligible employees in their 401(k) and 403(b) plans, setting aside at least 3 percent, but no more than 10 percent, of their paychecks. Contributions would be increased by one percentage point each year thereafter, until it reaches at least 10 percent (but not more than 15 percent). But this applies only to new employer-provided plans that are started in 2025 and later — existing plans are exempt.Another provision would help lower- and middle-income earners saving for retirement by making changes to an existing tax credit, called the saver’s credit, now available only to those who owe taxes. In its new form, it would amount to a matching contribution, from the federal government, deposited into taxpayers’ retirement accounts.People struggling with student debt would also receive a new perk: Employees making student debt payments would qualify for employer matching contributions in their workplace retirement plan, even if they were not making plan contributions of their own.What to Know About Congress’s Lame-Duck SessionCard 1 of 5A productive stretch. More

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      Marine Le Pen’s Message Finds a Strong Audience in the North

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      HARDECOURT-AUX-BOIS, France — Marine Le Pen spent the last two days of her campaign in the deindustrialized, economically struggling areas in the north of France that, along with a Mediterranean stretch in the south, form her strongholds.Exhorting her core supporters to vote on Sunday, Ms. Le Pen held events in the Somme department, home to towns and villages where her attacks against her rival, Emmanuel Macron, as an “arrogant” president full of “disdain” for ordinary people resonated powerfully.“To me, Emmanuel Macron is a president who has made the rich richer,” said Gaëtan François, 40, a construction tractor operator and a village councilor, outside the City Hall in Hardecourt-aux-Bois. “Marine Le Pen is the only one to defend the workers.”In Hardecourt-aux-Bois, a village of 85 people in the Somme, only three people voted for Mr. Macron in the first round earlier this month. Ms. Le Pen got 78 percent of the votes, her highest score nationwide.The village, like the rest of the region, has drifted rightward in the past decade.Maurice Clément, 82, a retired truck driver, said he had voted for Socialists most of his life. In 2017, he voted for Ms. Le Pen in the first round, but for Mr. Macron in the runoff because he was worried about the extreme right.This time, he had no such worries. Mr. Macron’s policies, he said, had plunged France in a “hole,” citing the record government debt accumulated during his presidency. He was angry about Mr. Macron’s proposal to raise the retirement age to 65 from 62 as part of his plans to overhaul the pension system. For those who had done hard manual labor all their lives, retiring at 65 was the equivalent of retiring in “crutches,” he said.Ms. Le Pen, he said, “is the only choice.”About 24 miles away, Ham, a town of about 5,000 people, has also shifted rightward in recent years. In the 2012 presidential election, people in Ham voted like the rest of the nation by choosing François Hollande, the Socialist Party candidate, over the center-right Nicolas Sarkozy.But in 2017, Ham picked Ms. Le Pen over Mr. Macron. Ms. Le Pen won 56 percent of the votes in Ham, compared with only 34 percent nationwide.On Sunday, Ms. Le Pen was expected to handily defeat Mr. Macron in Ham once again. In the first round of voting two weeks ago, she had 41 percent of the votes, with Mr. Macron getting only 24 percent.Beyond Ms. Le Pen’s focus on the working class, her longstanding tough talk on crime and immigration appealed to voters like Hubert Bekaert, 68, a retired optician.“I’m sick of using taxpayer money to house terrorists in prison,” he said, adding that he wanted the death penalty restored. “Marine Le Pen is the only one who’s tough on crime.” More

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      French Candidates’ Economic Programs Hold Key to the Election

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      Promising tax cuts, higher wages and changes in the retirement age, President Macron and Marine Le Pen vie for undecided voters.PARIS — As President Emmanuel Macron wove through crowds during a campaign stop in northern France last week, an elderly voter got in his face to protest one of his most unpopular economic proposals: raising the retirement age to 65 from 62 to fund France’s national pension system.“Retirement at 65, no, no!” the woman shouted, jabbing a finger at Mr. Macron’s chest as he tried to assuage her. The boisterous exchange was caught on camera. Two hours later, he retreated, saying he would consider tweaking the age to 64. “I don’t want to divide the country,” he said on French television.Mr. Macron’s reversal on a key element of his economic platform, in an industrial region backing the far-right firebrand Marine Le Pen ahead of France’s presidential election next Sunday, was a reminder of the social distress dominating the minds of voters. He and Ms. Le Pen have starkly divergent visions of how to address these concerns.As they cross the country in a whirlwind of last-minute campaigning, their runoff will hinge to a large extent on perceptions of the economy. Worries about widening economic insecurity, and the surging cost of living amid the fallout from Russia’s war on Ukraine, have become top issues in the race, ahead of security and immigration.Ms. Le Pen won by a comfortable margin in the first round of voting last Sunday in places that have lost jobs to deindustrialization, where she has found a ready audience for her pledges to bolster purchasing power, create employment through “intelligent” protectionism and shield France from European policies that expanded globalization.An open-air produce market in Paris, in December. Economic insecurity and the cost of living have become top issues for voters in the presidential runoff.Andrea Mantovani for The New York TimesWhile Mr. Macron is still expected to win in a tight race, workers in restless blue-collar bastions may yet prove a liability. Despite a robust recovery in France from Covid lockdowns — the economy is now growing at around 7 percent, and unemployment has fallen to a 10-year low of 7.4 percent — many feel inequality has widened, rather than narrowed, as he pledged, in the five years since Mr. Macron took office.After France’s traditional left-wing and right-wing parties collapsed in the first round of voting, both candidates are scrambling to lure the undecided and voters who gravitated to their opponents — especially the far-left firebrand Jean-Luc Mélenchon — in large part by recasting major planks of their economic programs to appeal to those struggling to get by.Pensions is a case in point. Mr. Macron has worked to recalibrate his image as a president who favors France’s wealthy classes, the business establishment and white-collar voters as he set about overhauling the economy to bolster competitiveness.In 2019 he was forced to set aside plans to raise the retirement age to 65 after raucous nationwide strikes shut down much of France. He had sought to streamline France’s complex system of public and private pension schemes into one state-managed plan to close a shortfall of 18 billion euros, or about $19 billion.Following his confrontation in northern France last week, Mr. Macron insisted that he would continue to push back the retirement age incrementally — by four months per year starting next year — but that he was open to discussing an easing of the plan in its later stages.“It’s not dogma,” he said of the policy. “I have to listen to what people are saying to me.” Mr. Macron has struggled to achieve his goal of raising the retirement age to 65.Dmitry Kostyukov for The New York TimesMs. Le Pen accused Mr. Macron of engaging in a policy of “social wreckage” and of blowing with the wind to capture votes, although she has also shifted gears after the protectionist economic platform she advanced five years ago spooked businesses. She dropped plans to withdraw from the European Union and the eurozone.Today, Ms. Le Pen favors maintaining the current retirement age of 62, abandoning a previous push to reduce it to 60 — although certain workers engaged in intensive manual labor like construction could retire at the lower age.As Ms. Le Pen seeks to rebrand her far-right National Rally party as a kinder, gentler party than the one she steered in 2017, albeit with a clear anti-immigrant message, she has focused on economic issues close to blue-collar voters’ hearts.She got out front on one of the biggest issues of the campaign: a surge in the cost of living.While Mr. Macron was trying to broker a cease-fire in Ukraine, Ms. Le Pen was visiting towns and rural areas across France, promising increased subsidies for vulnerable households.She has pledged a 10 percent hike in France’s monthly minimum wage of 1,603 euros. She is also vowing to slash sales taxes to 5.5 percent from 20 percent on fuel, oil, gas and electricity, and to cut them altogether on 100 “essential” goods. Workers under 30 would be exempt from income tax, and young couples would get interest-free housing loans.Her France-first policy extends even further: To make up for increased spending on social programs, she has said she would slash billions in social spending on “foreigners.”Marine Le Pen speaking to supporters on April 10 after the first round of the French election. She has tried to recast her far-right party in a kinder, gentler form.Andrea Mantovani for The New York TimesShe has also vowed to create jobs and re-industrialize the country by prioritizing French companies for government contracts over foreign investors and dangling a host of expensive tax incentives to encourage French companies that have branched out overseas to return to France.While she has abandoned talk of a so-called Frexit — a French exit from the European Union — some of her proposals to protect the economy would amount to essentially that, including a pledge to ignore some European Union laws, including on internal free trade. She has said she would withhold some French payments to the bloc.Mr. Macron has branded such promises “pure fantasy” and is proposing to retain many of his pro-business policies, with modifications.Having vowed to lure jobs and investment, under his watch foreign companies have poured billions of euros into industrial projects and research and development, creating hundreds of thousands of new jobs, many in tech start-ups, in a country that has not easily embraced change.At the same time, he has faced a challenge in discarding the image of an aloof president whose policies tended to benefit the most affluent. His abolition of a wealth tax and the introduction of a 30 percent flat tax on capital gains has mainly lifted incomes for the richest 0.1 percent and increased the distribution of dividends, according to the government’s own analysis.After a growing wealth divide helped set off the Yellow Vest movement in 2019, bringing struggling working-class people into the streets, Mr. Macron increased the minimum wage and made it easier for companies to give workers “purchasing power bonuses” of up to 3,000 euros annually without being taxed, a policy he has pledged to beef up.The candidates have tried to address concerns about rising fuel prices in blue-collar areas like Stiring-Wendel, a former coal mining town in France’s northeast.Andrea Mantovani for The New York TimesAs inflation has surged recently, Mr. Macron has also authorized billions of euros in subsidies for energy bills and at the gas pump and has promised to peg pension payments to inflation starting this summer. He has vowed new tax cuts for both households and businesses.His economic platform also aims for “full employment,” in part by pressing ahead with a series of pro-business reforms that has continued to lure the support of France’s biggest employers’ organization, Medef.“Emmanuel Macron’s program is the most favorable to ensure the growth of the economy and employment,” the group said last week, adding that Ms. Le Pen’s platform “would lead the country to stall compared to its neighbors and to put it on the sidelines of the European Union.”For all the differences, the pledges by Mr. Macron and Ms. Le Pen have one thing in common: more public spending, and less savings. According to estimates by the Institut Montaigne, a French economic think tank, Mr. Macron’s economic plan would worsen the public deficit by 44 billion euros, while Ms. Le Pen’s would widen it by 102 billion euros.“These shifts are significant enough to think that some of their proposals cannot actually be applied — except if they put in place budget austerity measures that they are not talking about,” Victor Poirier, director of publications at the Institut Montaigne, said. More

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      David McCormick Faces Scrutiny Over Teacher Pension Investments

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      David McCormick, a Republican Senate candidate in Pennsylvania, came under attack from his chief rival, Dr. Mehmet Oz, over the underperformance of investments for the state’s teachers.Before he entered Pennsylvania’s Senate race, David McCormick oversaw a giant hedge fund that invested billions of dollars for the retirement plans of the state’s teachers.But Mr. McCormick’s company, Bridgewater Associates, delivered such middling profits and charged such high fees that the Pennsylvania teachers’ retirement fund moved to sell off its Bridgewater holdings beginning two years ago.Overall, Bridgewater’s performance was a contributing factor in nearly a decade of poor returns for the retirement fund, trustees of the fund said in interviews.The impact is now being felt indirectly by thousands of teachers who have to pay more from their paychecks to fund their retirements, an extra $300 annually in some cases.Since jumping into the Republican primary in January, Mr. McCormick has offered his business career as a qualification for the open Senate seat in November, but he has made little mention of his connection to the state’s teacher pension fund, which has long been mired in controversy, nor to the more than $500 million in fees that Bridgewater was paid by the fund.But on Tuesday, Mr. McCormick’s chief Republican rival, the celebrity doctor Mehmet Oz, sought to use those high fees and Mr. McCormick’s decade on top of Bridgewater, the world’s largest hedge fund, against him.“We’re stuck with a half-a-billion-dollar bill while he and his colleagues got half a billion in fees,” Dr. Oz said outside the Harrisburg headquarters of the pension fund, the Public School Employees Retirement System, known as PSERS. He addressed a small group of supporters with a large prop check made out for $500 million.“The fact that no one knows this story,” he added, is “shameful.”Until 2019, the retirement fund had nearly $5 billion invested with Bridgewater, among the most of any firm, and it was one of the hedge fund’s top clients.In response to Dr. Oz, the McCormick campaign said that Bridgewater had made plenty of money for the retirement fund and that Mr. McCormick, who served as president and later as chief executive of the hedge fund, was not directly involved in overseeing its relationship or investments with PSERS.The dispute is the latest round in a slugfest between Mr. McCormick and Dr. Oz, whose primary contest will help shape one of the most crucial races this year for control of the Senate. The two candidates and their outside supporters have already spent a state record $30 million in attack ads ahead of the May 17 primary. A Fox News poll this month of potential Republican voters showed Mr. McCormick on top of a five-person field, although many voters are undecided.A Guide to the 2022 Midterm ElectionsMidterms Begin: The Texas primaries officially opened the 2022 election season. See the full primary calendar.In the Senate: Democrats have a razor-thin margin that could be upended with a single loss. Here are the four incumbents most at risk.In the House: Republicans and Democrats are seeking to gain an edge through redistricting and gerrymandering, though this year’s map is poised to be surprisingly fairGovernors’ Races: Georgia’s contest will be at the center of the political universe, but there are several important races across the country.Key Issues: Inflation, the pandemic, abortion and voting rights are expected to be among this election cycle’s defining topics.A West Point graduate and former Treasury Department official, Mr. McCormick was recruited by Bridgewater as president in 2009, rose to co-chief executive in 2017 and became sole chief executive in 2020 before leaving in January to run for Senate.The Pennsylvania teachers’ pension fund has been troubled for years. Besides hedge funds, it put its money into highly risky “alternative” investments including trailer park chains, pistachio farms and pay phone systems for prison inmates.In mid-2020, the fund’s annual profits over nine years, a decade when the stock market boomed, amounted to just 6.34 percent, missing a target set by Pennsylvania law.The shortfall prompted $80 million in higher paycheck deductions for about 100,000 teachers and other school employees, as well as higher property taxes for homeowners statewide, to pay for school districts’ makeup contributions to the pension fund, said Stacy Garrity, the state treasurer.Mr. McCormick’s campaign said that he had not directly been involved in overseeing Bridgewater Associates’ relationship with the Pennsylvania teachers’ retirement fund or overseeing the fund’s investments.Libby March for The New York TimesMr. McCormick, who declined to be interviewed, said through a campaign spokeswoman that PSERS’s poor performance was not the fault of its Bridgewater holdings — as Dr. Oz argued — and that those holdings had earned money for the pension fund. “Pennsylvania retirees made $3.9 billion in net profits and did not lose a penny over the life of the relationship under Bridgewater management,” the spokeswoman, Jess Szymanski, said.Still, some Bridgewater investments did miss internal benchmarks that the retirement fund had set, which contributed to the decision by the board of trustees to sell off its Bridgewater investments, along with those in other hedge funds.In the most recent quarterly reporting period, PSERS’s largest Bridgewater investment, the Pure Alpha II fund, underperformed a benchmark for comparable funds over the preceding three-, five- and 10-year periods. It exceeded the benchmark over a one-year period.More important than the individual Bridgewater investments, according to board members, was that Bridgewater’s investment philosophy came to dominate the retirement fund’s broad portfolio, currently valued at more than $72 billion.At a July 2020 meeting with senior retirement fund staff members, Joseph Torsella, the state treasurer at the time, criticized Bridgewater’s poor performance and its wide influence over the pension fund.Mr. Torsella, a Democrat, said in an interview, “I got the sense we were important at the highest level of Bridgewater, and I got the sense at PSERS that Bridgewater was the one true church.”Bridgewater, which manages about $140 billion, largely for institutional clients, is known as much for a culture in which employees bluntly air their differences as it is known for its investing record. It boasts of earning customers tens of billions of dollars over four decades.Its founder, Ray Dalio, is a multibillionaire who popularized an investing strategy known as “risk parity.” It promises to make money in both good and bad economic times by placing bets across different types of assets such as gold, Treasury bonds and sovereign wealth funds.During the 2008 financial crisis, when stocks went into a free-fall, Bridgewater’s Pure Alpha fund gained 9.5 percent. That was the start of an infatuation with Bridgewater by the professional staff at the Pennsylvania teachers’ fund, according to board members and their aides.Walloped by its declining stock holdings, the retirement fund embraced the risk parity model. It not only loaded up on Bridgewater’s own funds, it molded itself into a Bridgewater-like hedge fund.A report for the Pennsylvania legislature in 2018 found that PSERS’s portfolio allocation “reflects a risk parity model.”Mr. McCormick on the campaign trail in Edinboro, Pa. He topped a recent Fox News poll of Republican primary candidates, though many voters were undecided.Libby March for The New York TimesIt was a highly unusual, and risky, approach for a public fund that sends monthly checks to 250,000 former teachers, custodians and other school employees.“The real impact of Bridgewater on PSERS was not just that Bridgewater was one among a couple of hundred managers — they were the guru,” said Mr. Torsella, who was part of a bipartisan group of board members who began challenging the way the pension fund was run. “Too many of the investment team at PSERS became acolytes of Bridgewater. There was too much deference to their way of thinking.”Certainly, no one at Bridgewater was twisting the arms of PSERS’s staff to imitate the hedge fund’s strategy.Still, teams of retirement fund staff members trooped to Bridgewater’s wooded campus in Westport, Conn., or hosted Bridgewater consultants in Harrisburg for daylong seminars. In 2019, top pension fund executives flew to China for two Bridgewater events, including a weeklong “investor summit,” at a cost of $4,467 in travel.Over the decade following the financial crisis, as the stock market recovered and boomed, PSERS’s embrace of a risk parity model of investing had a disastrous impact on the pension fund’s bottom line. As of 2018, the retirement fund’s returns over a decade ranked 50th out of 52 public pension plans nationwide, according to the report for state lawmakers.Although Bridgewater’s funds were promoted as a way to weather a bear market in stocks, the arrival of the pandemic in 2020 proved that the complex financial straddles didn’t live up to the hype. Bridgewater’s Pure Alpha fund was underwater for the year, even as the S&P 500, the broad stock market index, gained more than 16 percent.The dissidents on the PSERS board, who favored a plain-vanilla portfolio of largely public stocks and bonds, succeeded in pushing the pension fund to sell off two of its Bridgewater funds, All Weather and Optimal, and to eventually liquidate all of its hedge fund investments.In July 2021, the pension fund was forced to increase paycheck deductions for 94,400 school employees hired since 2011.Samantha Kreda, who teaches special education to third to fifth graders at the Richard R. Wright School in Philadelphia, was one.Samantha Kreda in her classroom in Philadelphia.Hannah Yoon for The New York Times“The PSERS increase amounted to $30 every paycheck, but that’s a huge amount of money considering all the things teachers are expected to pay for,” she said. She buys books, snacks, birthday gifts and school supplies out of her pocket for students in her high-poverty school. Rather than cut back on those extras, she said, she has reconsidered “splurges” like dinner out with her boyfriend.Ms. Kreda, 27, who has a master’s degree from the University of Pennsylvania, knows Ivy League peers who went into law or finance and now make “unfathomable” salaries. “I love my job; I don’t teach for the paycheck,” she said. Still, a $30 deduction from her biweekly pay gives her pause. “It definitely makes a difference,” she said.Maureen Farrell More