Argentina’s Senate defied President Javier Milei to push through an increase to pension spending that would cost at least 0.4 per cent of the country’s gross domestic product, dealing a blow to his tough austerity program.
The bill, which already swept through the lower house in June, passed the Senate in a 61-8 vote. All but one of the lawmakers who voted against the bill were from Milei’s party, a sign that the president’s allies had failed to negotiate with more moderate right-wing parties.
Milei has vowed to strike down legislation that undermines his ‘zero deficit’ plan, but lawmakers could override his veto by passing the law with a two-thirds majority again.
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The pension law, which sets more than an eight per cent increase in retirement benefits this year, threatened to revive investors’ fears about Milei’s ability to implement his radical agenda aimed at rescuing Argentina’s long-troubled economy — notorious for debt defaults, chronic overspending and runaway inflation.
Opposition lawmakers hailed the law, which includes cost-of-living adjustments for pension benefits to keep pace with the country’s dizzying 260 per cent annual inflation rate. Since 2017, the law’s supporters say pensions in Argentina have lost 45 per cent of their value as prices soared and the country’s currency slid against the dollar.
The minimum monthly pension hovers around $233 while the basket of goods and services typically used to calculate inflation costs over $300 a month.
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