Deputies approve new pensions formula, Milei vows to veto if senators follow

‘I won’t give up fiscal balance,’ the president said after Peronism united with the so-called friendly opposition to approve the bill

The Lower House approved a new pensions formula after Peronist deputies from Unión por la Patria coalition and the so-called “friendly opposition” reached an agreement early Wednesday. The bill will now move to the Senate for final approval. 

President Javier Milei, however, has vowed to veto it if Congress passes the formula, saying he “will not give up fiscal balance.”

“Here’s a tweet so it’s clear for everybody: Under no circumstances will I give up fiscal balance,” Milei posted on X at 1.30 a.m. on Wednesday. “I will defend the state budget through veto power if necessary.”

The president continued defending his position online. Minutes before 2 a.m., he posted a series of AI-generated pictures of a humanoid lion wearing a presidential sash and brandishing a sword against rats that surround a box full of money.

Approval of the bill came as a surprise, given that it was born from an unlikely alliance between Peronists and other opposition blocs that have mostly been willing to collaborate with Milei’s proposals.

Deputies approved the proposal with 160 votes in favor and 72 against after 14 hours of debate. Unión por la Patria, Unión Cívica Radical, Hacemos Coalición Federal, and Coalición Cívica decided to unify two separate pension formulas under debate to pass a bill. Eight lawmakers abstained from voting.

Ruling coalition La Libertad Avanza and right-wing PRO, the government’s biggest ally in Congress, voted against it.

The result represents a big stepback for the ruling coalition in Congress, given that, until now, most members of Unión Cívica Radical and Hacemos Coalición Federal had voted in line with the government’s interests since the new administration came into power in December.

If approved by senators, the new bill would add an additional 8,1% raise to the 12.6% increase established via presidential decree in March. The total raise would be 20.6%. This figure equals January inflation levels, considering that the increase established by the government was below inflation. This would be the basis for future increases, which will be set in line with inflation.

The text proposes an extra yearly increase in March based on salary and inflation. It also establishes that the minimum pension should be 9% above the total basic basket for adults. This means the minimum would go from the current AR$206,931 (US$225.78 at the official rate, US$161.56 at the MEP rate) to AR$285,000 (US$310.96, US$222,51).

The fiscal cost of this would be 0.43% of the national GDP, according to the Congress Budget Office.

Milei continued his rant against the bill well after his initial posts. “If we give in to political delirium, inflation will come back and we will continue the path of decline we initiated a century ago, which has brutally impoverished us,” he wrote on X at 9:30 a.m.

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