Saturday, May 18, 2024

ARGENTINA | 08-05-2024 21:33

Government gears up for ‘omnibus’ Senate showdown

Make-or-break vote on sweeping reform bill likely to take place next week; Numbers look challenging for La Libertad Avanza, which will need support of allies to secure passage.

President Javier Milei’s government is preparing for a make-or-break showdown in the Senate with its ‘Ley de Bases’ mega reform bill set to go to a vote in the upper house next week.

The Senate began committee debate this week on the sweeping package of deregulatory economic reforms more commonly known as the ‘omnibus’ bill. The proposed legislation, and an accompanying fiscal package, gained lower house approval last month.

Interior Minister Guillermo Francos headed the plenary meeting of the General Legislation, Constitutional Affairs and Budget committees on Tuesday, defending the bill along with other government officials as questions and queries flooded in from opposition senators.

Tensions ran high. The parliamentary day started with a series of accusations and harsh clashes between the libertarían officials and the opposition, beginning with Unión por la Patria senators proposing that the bill be quashed, declaring that its text differed from what the deputies had approved. Presidential Spokesperson Manuel Adorni admitted as much on Tuesday and the final text was only circulated the following day.

Within the framework of a tense session, the chapter most questioned was the RIGI (Régimen de Incentivo para Grandes Inversiones) scheme of incentives for major investors – a proposal that has received pushback from local firms.

The numbers in the upper house look challenging for the Milei administration. La Libertad Avanza has just seven senators out of a total of 72 as against 33 Peronist senators who are all expected to vote against. 

Political scientist Andrés Malamud said that "the Senate is trickier than the Deputies because the government caucus is smaller [10 percent as against 15 percent], Kirchnerism is more numerous and Senator Martín Lousteau heading the Unión Cívica Radical (UCR) complicates the deals struck with other Radicals."
If any chapter is rejected or amended, the bill must return to the lower house Chamber of Deputies.


Committee clashes

Lousteau and other senators from the UCR, a key caucus for clinching the vote, have questioned several chapters, especially the regime of tax, Customs and exchange rate incentives for major investments and the pension reform, which among other things eliminates universal access to the mínimum retirement benefit.

Even if the seven La Libertad Avanza senators can count on the support of PRO, there is no homogeneous stance among the Radicals, as Lousteau is one of the first to point out. Those 13  Radical senators are crucial for both quorum and the advance of the law.

Controversy was already brewing on Tuesday morning when opposition legislators denounced that the text entering the Senate did not coincide with that approved by the deputies, asking for it therefore to be dropped.

The final text of the legislation began circulating among most lawmakers and journalists only on Wednesday.

Consulted on the issue, Adorni recognised "typing errors," later sending corrections to the Senate, which were dismissed as "useless" by Peronist Senator Silvia Sapag during the meeting.

Via the RIGI, La Libertad Avanza is proposing a programme of benefits for investments superior to US$200 million to accelerate investment decision-making by offering an improved framework of legal security. This is one of the initiatives most resisted by opposition senators..

The government was seeking a committee ruling by Thursday and a green light from the Senate next week although the opposition has requested a "prudential period" to discuss the norms.

The government is pressured to have the law approved before May 25, the day on which Milei has convoked the entire political spectrum to sign his 10-point "social contract" known as the “Pacto de 25 de Mayo,” which includes the "inviolable" defence of private property and an "unnegotiable" balanced budget. Yet for that to happen, it would have to be approved without any amendment or otherwise return to the Deputies. 

Unión por la Patria is geared to vote against the ‘Ley de Bases’ despite the speculation about the influence which Peronist governors interested in the bill’s approval might have. Senators Carlos Linares and Mariano Recalde have assured that all 33 of their party colleagues will reject it.

They further agreed on the difficulties of achieving the government objective of debate on the house floor before the May 25 pact.

La Libertad Avanza is betting on the influence of the Peronist governors favouring the Ley de Bases on the senators responding to their orders. They celebrate Catamarca Governor Raúl Jalil speaking out in public on the need to approve the bill.

Yet Recalde y Linares have denied any possibility of a vote in favour from any of the 33 Unión por la Patria senators.

"There will be no surprises. We had a caucus meeting yesterday and the previous Friday. All the senators are in Buenos Aires, we have met up with the CGT and CTA [labour umbrellas] and I see a compact caucus," underlined La Cámpora leader Recalde.

Patagonian bloc

The governor of the Patagonian provinces are preparing a counterproposal to the "Pacto de Mayo" pushed by President Milei, revolving around fiscal federalism, production and the unrestricted defence of public education.

The governors of Neuquén (Rolando Figueroa), Río Negro (Alberto Weretilneck), Santa Cruz (Claudio Vidal), Tierra del Fuego (Gustavo Melella), La Pampa (Sergio Ziliotto) and Chubut (Ignacio Torres) have recently conversed to coordinate actions during Senate debate of the Ley Bases as approved by the deputies. One of the main points is the distribution of funds but also the return of income tax for some workers, which could affect Patagonian citizens having to pay more as a result of higher earnings in the oil industry and fisheries.




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