The presidential vetoes signed last weekend against legislation on behalf of pensioners and the handicapped followed in midweek by defiant Congress passage of its university funding bill confirm that the executive and legislative branches are on a collision course for the rest of this month at least – the absence of deputies on the stumps might or might not diminish the number of sessions after the official start of the midterm election campaign on August 27. That confrontation fits neatly into the polarisation sought by the two main contenders in the midterm clash – a polarisation which by definition reduces complex issues to either/or propositions. It becomes very difficult to advance any third way alternatives when that third way in politics lacks muscle, unity and, above all, self-esteem – as William Butler Yeats wrote in his poem “The Second Coming” over a century ago: “The best lack all conviction while the worst are full of passionate intensity.”
Whatever the issue at stake in the current confrontation – whether pensions, the handicapped or the universities – the approach of both the libertarian administration and the opposition is simplistic in the extreme with the former slashing across the board in the name of the fiscal surplus while the latter throw money at the problem. But in none of these issues should it be a question of taking these structures as they are and then deciding whether they deserve more or less funding.
The first step is always going to be recognising the complexity of the problem with diagnosis preceding remedy. The debate on pensions centres on the loss of around a quarter of purchasing power under the current administration, a driving factor behind those midweek marches outside Congress while the libertarians make little attempt at any direct defence, instead pleading the superior benefits of lower public spending taming inflation. But a closer look at the damage would show that while indeed being inflicted during the Javier Milei presidency, it largely came from continuing the updating mechanism of Alberto Fernández blithely ignoring inflation during the first quarter of 2024 with double-digit inflation every month (a deliberate and cynical continuation, it could still be argued) – Milei’s own mechanism with index-linking is actually much better, thus complicating the blame game between present and previous presidents. Further confusing the issue is the rift between minimum retirement benefits and the rest. While the fall in the former was restricted to two percent via bonuses under Alberto Fernández with the rest suffering a 25 percent loss in purchasing power, Milei has moved in the opposite direction by freezing the bonus.
For both government and opposition, the question is more or less spending on pensions with few stopping to consider how more can come out of less. In other words, instead of taking the pension system as is and then padding or slashing it, more attention should be paid to the myriad special schemes, some of which enable people to retire at 50 – privileged pensions for politicians do sporadically enter the spotlight but they are just the tip of an iceberg. Even the current retirement age of 65, never mind 50, is looking obsolete with an ageing population and the increased vitality of senior citizens – raising the retirement age would save the pension system billions while probably aggravating the acute problem of youth unemployment. In short, the solution does not have to be more or less but more for some and less for others.
The other two bills vetoed by President Milei last weekend – the pension moratorium and the state of emergency for the handicapped – are also complex. It is easy enough to play the elder brother in the parable of the prodigal son and express indignation over even a sparse pension being granted to people who have never paid a social security contribution but millions of those people are housewives bringing up families without reward. On the other side of the fence, it is also easy enough to express indignation over government insensitivity towards the handicapped but extra money for them could also be found within the current budget – abuse is reported in some provinces of these benefits being used as handouts (with a suspiciously high 21 percent of the population registered with some kind of handicap in Santiago del Estero).
A Congress vote is always going to be an aye or a nay with abstention the only other option but no issue should be reduced to an either/or proposition before exploring the middle ground.
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