Milei wins Argentina Budget approval despite tensions with Macri

Argentina’s Senate approved President Javier Milei’s Budget bill for 2026, cementing a legislative victory that overcame renewed tensions between the libertarian leader and his top ally.

In a 46-25 vote, senators passed Milei’s Budget in a general vote for the first time since he took office in 2023. The legislative win reflects Milei’s new political capital after his party emerged victorious from the October midterm elections and has become the top caucus in the lower house.  

The results indicate Milei, who has 19 senators in his party, received widespread support from other parties. One senator abstained from the general vote. 

The Budget was Milei’s first major test in Congress since his midterm election victory. Analysts saw it as an opportunity for him to demonstrate political strength by getting legislation across the finish line after largely governing by decree during his first two years in office. Lawmakers will debate Milei’s labour reform in February, making the Budget debate something of a preview. 

Although the bill’s focus is fiscal policy, it also authorises Milei’s administration to issue debt abroad, complying with a law from his predecessor that requires governments to secure congressional approval for foreign bond sales or agreements with the International Monetary Fund. Argentina owes bondholders about US$4.5 billion on Jan. 9, but Economy Minister Luis Caputo recently signalled the government doesn’t intend to sell new bonds abroad in January to refinance part of those payments. 

Passing the Budget also puts Argentina’s US$20-billion IMF agreement on sounder footing heading into the new year to anchor Milei’s fiscal surplus. 

In the political arena, Milei revived simmering tensions with allies on two fronts in the earlier stages of the Budget process. He attempted to change spending on universities and disability programmes, two issues over which he’s battled with centrist blocs this year. Lawmakers in the lower house ultimately passed Milei’s Budget by taking out text on those two topics. 

He also snubbed former president Mauricio Macri of the closely-aligned PRO party from receiving a seat on Argentina’s powerful auditor general board, roiling Macri’s legislators. Macri’s votes in Congress are important as Milei’s bloc is short of a simple majority and needs to negotiate with other parties. The auditor general, or AGN, is an influential entity on legislative matters.

Those tensions were set aside Friday as Milei received votes from Macri’s party and others.