President Javier Milei's sweeping ‘omnibus’ reform package was dealt a major setback on Tuesday as lawmakers in Congress prevented it from advancing and the bill was promptly returned to committee stage for a rewrite.
The drama came despite the bill winning general approval in the lower house last week. However, as lawmakers began voting on the mega-reform bill article by article on Tuesday, it became clear that the government did not have the numbers to pass key sections.
Just as the Chamber of Deputies was preparing for a vote, the head of the La Libertad Avanza caucus in the lower house requested and obtained the adjournment of the session.
Oscar Zago, leader of the ruling party caucus, called for the bill "to go back to committee" in a motion passed by lawmakers that left the Milei's sweeping economic reform bill – which includes privatisations and the revamping of the penal code – up in the air.
"The governors [of the provinces] did not keep their word," he declared.
The matter is being sent "back to committee" for further dialogue, Zago added, while denying that the move was a failure for President Milei.
The new hurdle for the package, which last week won approval in principle pending further examination, was put up as Milei was on a trip to Israel.
The president responded furiously to the news.
"Our government programme was voted for by 56 percent of Argentines and we are not willing to negotiate it with those who destroyed the country," the far-right leader said in a post on the X social network from Israel, where he is on an official visit.
"We know that it will not be easy to change a system in which politicians have enriched themselves at the expense of Argentines," he added.
Presidential Spokesperson Manuel Adorni said that work on the package would continue and insisted that cuts to government spending will still have to be made.
"All government expenses will have to be reviewed to comply with President Milei's order, which is zero deficit," Adorni told the LN+ channel.
Members of the opposition celebrated what they saw as a victory.
"A political defeat for the government," said Peronist lawmaker Leandro Santoro, referring to the drama in parliament as "unprecedented ridicule" for the government.
Left-wing lawmaker Myriam Bregman told reporters that "this means they [the government] have to start from scratch.”
"The popular repudiation [of Milei’s reforms] was felt throughout the country," she continued, referring to protests that occurred last week in front of Congress during debate on the bill.
Bill's future unsure
The 'Omnibus Law' won general approval in the Chamber of Deputies last Friday, though lawmakers planned to vote on its articles one-by-one in Tuesday’s session.
The bill's key points include the delegation of emergency powers to Milei allowing him to govern by decree and sweeping state reform, including the privatisations of tens of state firms. Initially containing 660 provisions covering the economy, trade, culture, criminal law, even football clubs, the bill has since been whittled down to around 300 articles.
The future of Milei’s deeply controversial reform package – known formally as the "Ley de Bases y Puntos de Partida para La Libertad de los Argentinos" – is now unknown.
Milei has previously vowed to toughen austerity measures should the bill not pass Congress and even to put it to the people in a referendum.
The president’s office said in a second statement issued Tuesday night that provincial governors had taken “the decision to destroy” the bill and accused them of “betraying their voters.”
In last week’s marathon congressional sessions addressing the bill, the government was still negotiating articles with its allies even as the legislation was being debated.
Lawmakers did not receive a final copy of its text until the second day of sessions.
Earlier in the afternoon, the deputies present had approved special "delegated powers" for Milei, which would allow him to govern by decree for at least one year, though opposition lawmakers managed to reduce its scope.
"We are afraid of a weak democracy, which concentrates in a single person the possibility of extorting companies, organisations and citizens and ends up leaving us all defenceless,” said Coalición Cívica ARI deputy Paula Oliveto.
The original text of the law promoted the far-right idea of "limiting all state intervention that is not necessary to ensure the effective exercise of their constitutional rights.”
The government received narrow support (134 to 121 votes) for the declaration of an economic, financial, security, tariff, energy and administrative emergency. The opposition forced the withdrawal of declarations of fiscal, social security and health emergencies.