Friday, June 14, 2024

ARGENTINA | 05-06-2024 10:20

Milei vows veto as deputies approve new pension formula

Deputies rebel against government, voting 160-72 in favour of new formula to update pensions; President immediately vows to strike down bill should it clear Senate.

President Javier Milei vowed to strike down any new bill that increases government spending on pensions in the early hours of Wednesday after deputies in the lower house voted for a new formula to improve payments to the retired.

Milei, who has slashed government spending since taking office last December in a bid to improve Argentina’s struggling economy, promised a “pure veto” if the bill, which still has to clear the Senate, comes across his desk.

“I leave you this tweet to make it clear to everyone: I will not surrender fiscal balance in any way. I will defend the Treasury with a pure veto if necessary,” Milei posted on the X social network after deputies voted 160-72 to approve the new formula .

Argentina’s lawmakers “impoverished the country by pure fiscal deficit, so there is no way I will allow this to happen again,” declared the President.

The post was made just after midnight, minutes after the Chamber of Deputies had approved a new pension updating formula which will hike payments by around 20.6 percent – the amount they lost back in January when Milei introduced a new calculation mechanism by emergency decree.

The new formula also approves an annual update based on inflation and wage variations and establishes a minimum pension (which today would be 285,000 pesos a month) based on the total basic shopping-basket of goods. 

According to estimates by the Congressional Budget Office, the bill has a fiscal cost of 0.43 percent of GDP.

Milei’s La Libertad Avanza party is firmly in the minority in both chambers and the passage of the bill, which is a blow to the government, underlines its weakness in Congress. 

The new formula, which is a unification of proposals from Peronist, UCR, Hacemos Coalición Federal and the Coalición Cívica deputies, was agreed after 14 hours of debate.

Highlighting the libertarian government’s lack of control, Hacemos Coalición Federal and Unión por la Patria lawmakers worked together to reject an article which would eliminate privileged pensions for the nation’s former presidents and vice-presidents.

After the general vote was passed, influential lawmaker Miguel Ángel Pichetto, a dissident Peronist who heads the Hacemos Coalición Federal caucus, successfully introduced a motion to eliminate the article.

Giving his reasoning, Pichetto said that “whoever thought of this has a very perverse vision of anti-politics.”

“Fundamentally, he believes that politics is for drug-dealers, marginalised people, criminals, people with no interest in defending Argentina and he thinks that the President, when they finish his job, has to go and ask for a job in some factory,” said the lawmaker.



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