Argentina’s Senate has delivered a blow to President Javier Milei’s economic agenda, approving a significant increase in pension spending. The vote, which passed with a resounding 61-8 majority, could derail Milei’s efforts to balance the budget and tame the country’s rampant inflation.
Milei, a libertarian and staunch Bitcoin advocate, campaigned on a platform of fiscal austerity, promising to cut public spending and reduce the deficit. Since taking office, he has achieved some success, securing the first budget surplus in over a decade and recording six consecutive months of fiscal surplus.
However, the Senate’s decision to increase pension payments, which takes into account Argentina’s triple-digit inflation, throws a wrench into his plans. While Milei has vowed to veto the bill, the overwhelming support it garnered in both houses of Congress suggests that a two-thirds majority needed to override a veto is likely within reach.
This development is particularly significant given Milei’s commitment to reducing public spending. His critics have accused him of pursuing austerity measures that have disproportionately impacted the poor, leading to job losses in the public sector and cuts to energy and transportation subsidies. While Milei maintains that the burden has primarily fallen on what he calls the ‘political corporation,’ his opponents argue that millions of Argentinians are suffering as a result of his policies.
Despite the challenges, Milei remains committed to his economic reforms, which are largely based on free-market principles and a strong belief in Bitcoin. He has been praised by some for his efforts to address Argentina’s long-standing economic problems, with former US President Donald Trump even drawing parallels between Milei’s policies and his own ‘Make America Great Again’ approach.
The Senate’s decision to approve the pension hike represents a significant obstacle to Milei’s agenda. It remains to be seen whether he can overcome this hurdle and continue to implement his economic reforms.
