CDU Proposes Harsh Cuts to Social Benefits, Prompting Political Outrage

The CDU Economic Council is calling for sweeping cuts to social benefits to curb rising social contribution costs. Under the proposals published on Sunday as part of the association’s “Agenda for Workers,” dental treatments would no longer be covered by statutory health insurance, unemployment benefits would be limited to one year, and both the mothers’ pension (Mütterrente) and retirement at 63 would be abolished. On the other hand, the agenda also includes tax reductions for employees. Overall, workers would be “significantly relieved,” the association stressed.

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“We are calling for a genuine agenda for workers in this country, an agenda that rewards performance, ensures affordable energy, enables home ownership, and cuts through bureaucracy,” said Wolfgang Steiger, the Council’s Secretary General. The unemployment figure, which rose to over three million in January, was an “unmistakable signal that politics must now finally do everything possible to renew the promise of upward mobility and unleash growth forces,” he said.

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Among the proposals is a plan to link the retirement age “in the medium term” to life expectancy, raising it beyond 67. In long-term care insurance, private supplementary insurance should “play a greater role” in the future.

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In statutory health insurance, the benefit catalog should be reviewed, “various benefits, such as dental treatments, can generally be insured privately and should no longer burden contributors under the pay-as-you-go system.” Under the proposals, work-related accidents would also no longer be covered by the accident insurance system.

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Exploding social contributions were a particularly German problem, the Council said. Contributions were below 35 percent until 1985, surpassed the 40 percent mark in 2023, and are heading toward 45 percent. This makes financial restraint all the more important.

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At the same time, the association wants to significantly reduce the tax burden on employees. The basic tax-free allowance should be substantially increased, “inflation-adjusted, it has been stagnant for 25 years.” The income threshold for the top tax rate must be raised, the current threshold of just under 70,000 euros is “a bad joke.” The association also called for an automatic inflation adjustment to income tax and the complete removal of the solidarity surcharge even for high earners.

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Corporate taxes, the Council said, should be reduced to 25 percent; they currently average around 30 percent according to the Finance Ministry. The Council also proposed lowering energy costs for everyone, making it easier to purchase property, including by abolishing real estate transfer tax, and reducing bureaucracy. The CDU Economic Council was founded in 1963 at the suggestion of Ludwig Erhard and represents around 13,000 companies, according to its own information.

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Steiger criticized that the SPD had “mutated into a party for the concerns of benefit recipients” and had “lost the support of workers and employees to an alarming degree.” The same risk exists for the CDU “if it continues to support SPD proposals to the extent it has so far.” SPD politician Bernd Rützel, chairman of the Bundestag Committee on Labour and Social Affairs, described the Council’s proposals as “a slap in the face for 90 percent of Germans.” He advised the CDU to “quickly forget such proposals,” he told the Augsburger Allgemeine (Monday edition).

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BSW politician Fabio De Masi said: “Anyone who no longer reimburses dental visits will only create more follow-up costs and further weaken private purchasing power.” A government “that has put the economy into a coma and cannot even manage to lower the electricity tax or increase investment in infrastructure should remain silent on dental care,” he said.

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The Social Association of Germany (SoVD) called the paper “antisocial” and “disturbing.” Excluding dental care from health insurance would intensify the existing two-tier medical system, chairwoman Michaela Engelmeier told the Funke Media Group newspapers. “The wealthy would have beautiful teeth, the poor even more gaps,” she said.

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