Veto swings and roundabouts
The best way for Milei to defend his cherished fiscal surplus would not be knee-jerk vetoes but to present a budget – something which will require thinking outside the box and not just the chainsaw.
Springtime is still almost a month away for President Javier Milei and the midterm elections another month after then. It would be a cruel irony for him if after throwing the balance of payments out of the window and sending what at the start of the year was the world’s fastest growth among major economies after India in the opposite direction with recessive interest rates in order to retain his grip on the dollar exchange rate and inflation if the electorate were now to take controlled prices for granted and vote on the basis of other issues. Not even excluding those prices (steep by international comparison) but more especially issues like pensions and the disabled at the heart of Congress debate in midweek.
The handicapped threaten to be a handicap for the government in more senses than one. Not only because this was the area where the presidential veto on increased spending was overturned (unlike pensions, where the opposition failed to put its ducks in a row as to whether the veto should be totally or partially rejected) but also because of the explosive leaks from the director of Andis agency for the handicapped Diego Spagnuolo pointing to graft mechanisms – precisely one of the government’s main sticks to beat Kirchnerism in the upcoming midterms but now giving three discontented libertarian deputies the perfect excuse to break caucus ranks.
Government handling of the sensitive issue of the disabled has been clumsy, to say the least. If the accumulated irregularities in this area are on the scale the government claims (as they might well be in some provinces at least), there should be plenty of scope to improve benefits significantly and reduce the budget at the same time by weeding out the irregularities. It could also be argued that a redefinition of disabled is long overdue – thus if in the past century a person without legs was a clear-cut case, that same person nowadays could even become a billionaire if a hi tech genius (although still deserving assistance if not). But instead of exploring such avenues, Milei opted for the chainsaw and it was all too easy for the opposition to rally its deputies around the banner of aiding those with diminished capacities and throw out the veto by almost a three-digit margin (172-73 votes).
Yet any after-the-match inquest by the government is unlikely to consider the possibility of the issue being mishandled, instead in all probability writing off their failure as collateral damage from the definition of the midterm candidates the previous weekend. With nine less votes the presidential veto on the handicapped could also have been salvaged and it is possible that such maximalist libertarian strategies as blocking the re-election of the chief of the Unión Cívica Radical splinter supporting the government and giving no slack to various northern governors might have made the difference. These strategies of purist optimism are also questioned within government ranks but if the conclusion of collateral damage is reached, it stands to incline Milei to bashing the “caste” even harder at the expense of road maps for the next two years while deepening Congress deadlock.
More than once (including last week) this space has drawn attention to aspects of the Javier Milei administration reviving memories of the Carlos Menem presidency and the suspicions of corruption raised by Spagnuolo’s confessions are another case in point – not least because the Menem surname is so prominent in this government with Congress Speaker Martín Menem and Eduardo ‘Lule’ Menem, a key confidant of presidential chief-of-staff Karina Milei. Argentine voters are notoriously not as sensitive to graft exposés as they should be, normally vindicating “It’s the economy, stupid,” but all too many remember Menem for the traumatic end of his convertibility rather than for the eight years averaging almost seven percent growth which the dollar-peso parity currency board also engendered. Milei has successfully distanced himself from the failure of Mauricio Macri by loudly assuring that there is not a gradualist bone in his body but he is taking a big risk with any identification with Menem, who also ultimately failed.
The best way for Milei to defend his cherished fiscal surplus would not be knee-jerk vetoes but to present a budget (whose statutory deadline for submission is now only three weeks away) which distributes the available funds as rationally and fairly as possible – something which will require thinking outside the box and not just the chainsaw. The onus is on both government and opposition to offer constructive alternatives to gridlock.