President Javier Milei’s flagship reform bill, known as Ley Bases, is being debated on the Congress floor one last time in a session that began Thursday at 12:25 p.m. Following months of protracted negotiations, deputies will cast their final votes on modifications senators made to the bill. These include removing privatizations of key companies such as Aerolíneas Argentinas. 

They will also address a fiscal package, where the income tax threshold and personal asset tax reforms are a matter of fierce dispute.

In a parliamentary work meeting before the session, deputies agreed that forty lawmakers would speak during the session. The debate is expected to last around 12 hours. 

“We agreed that it should be a short session, but with so many deputies it will be at least 12 hours long,” head of ruling bloc La Libertad Avanza (LLA) Gabriel Bornoroni told the Herald minutes before the session. “We have the votes we need, we have been in talks with the heads of the other blocs.”

Since they have been approved by both chambers, the Ley Bases and the fiscal package are guaranteed to become law after Thursday’s session. Deputies are set to review the changes made by the Senate — they can only approve or reject them, and no more modifications to the text are allowed.

Ley Bases

The Ley Bases passed the Chamber of Deputies in April (after a failed attempt in February) and the Senate in June, with extensive modifications. Deputies from ruling coalition La Libertad Avanza (LLA) and the so-called “friendly opposition” agreed to support the changes made in the Senate. Speaking at a plenary session of multiple congressional committees on Tuesday, they also said they would insist on the original fiscal package text the Lower House had approved.

The Ley Bases approved in the Senate is 238 articles long, roughly one-third of the size Milei’s original project had in December, although the fiscal package is based on a fiscal chapter that was removed from the bill’s original draft. 

Both bills have been pared down to garner more support since the government originally filed them in December. Major changes were made to the Ley Bases privatization chapter: 40 public companies were originally on the chopping block. The Senate removed national airline Aerolíneas Argentinas, mail company Correo Argentino, and Radio y Televisión Argentina — a company grouping state-owned media outlets — from the list of public companies to be privatized.

In the end, only energy provider Energía Argentina and airport cargo company Intercargo are set to be completely privatized. Others, such as water provider AYSA and train company Trenes Argentinos, would be up for private concessions.

Senators also eliminated an article that would have ended a 2023 pension moratorium that currently allows people to access a state pension by paying for missing years of social security contributions. They also altered aspects of the proposed Incentive Framework for Large Investments (RIGI, by its Spanish initials) that would have severely affected Argentine jobs and smaller national companies.

The fiscal package

The Senate also approved the fiscal package as a general item in the same Ley Bases session. Among its most significant features are a fiscal amnesty and a tax moratorium, which were approved unanimously when they were voted as individual chapters. 

Senators, however, rejected lowering the income tax threshold and struck down a section that attempted to cut taxes on personal assets. They also removed an article that aimed to abolish a tax category for low-income self-employed workers known as the monotributo social (which currently allows them to declare their work and provides health coverage in exchange for a small monthly payment).

Although deputies will debate the Ley Bases as a whole, as was decided in commissions, several aspects of the fiscal package will be voted on individually.

The ruling coalition will now attempt to insist on certain aspects of the original text approved at the Lower House, making it so that people with monthly salaries of AR$1.8 million (US$1936 at the official rate and US$1,351 at the MEP rate) have to pay an income tax, and raising the threshold for which a person has to pay a tax on their properties to AR$100 million (US$107,584 at the official rate or US$75,103 at the MEP rate”.

“This is a stepback,” Peronist deputy Daniel Arroyo, from Unión por la Patria, told the Herald before entering the Lower House floor. “Around 140,000 people with higher income would be paying less taxes with the personal assets tax cuts, and 1.1 million citizens would now start paying the income tax.”

“The government is doing this because they need fiscal resources. Unemployment and inequality are on the rise. The situation is critical and these bills will not contribute to making families’ everyday lives better,” Arroyo added.

Bornoroni defended the fiscal package saying “the main goal is that people who pay more taxes are those who actually have an income, unlike the VAT, which is paid by everyone.”

“The goal of these bills is to offer benefits to a handful of business people, and take them away from workers,” left-wing deputy Vanina Biasi told the Herald. “The Ley Bases includes a very harmful labor reform: it extends trial periods, and companies will now be allowed to have unregistered employees without being sanctioned,” she said.

LLA has few deputies — 38 out of 257 — for a ruling coalition. However, with the support of right-wing and center-right blocs PRO (37 deputies), Unión Cívica Radical (UCR, 34), Hacemos Coalición Federal (16), and Innovación Federal (8), it has enough votes for the Ley Bases to pass with the modifications made by the Senate.

The fiscal package, however, is a different story: some UCR deputies are uncertain whether to back the text the Lower House had initially approved. “There are internal differences regarding the fiscal package, about income tax modifications,” a UCR source told the Herald. “It’s not clear how many UCR positive or negative votes there will be and whether lowering the income tax threshold will be approved.”

In April, when the Lower House debated the fiscal package, only nine UCR deputies voted against lowering the income tax threshold. “Perhaps that number will now grow,” the source said. Without the UCR’s full support, the Senate’s version of the bill could potentially prevail.

Hacemos Coalición Federal is confirmed to back both bills, despite some of its deputies potentially abstaining from voting, a source from the bloc told the Herald.

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‘Our homeland is not for sale’

The front of the square outside Argentina’s congress is fenced off, but unlike the previous debates there were only a handful of social organizations protesting the bills. As deputies spoke to the press before entering the building at around 11 a.m., some passers-by yelled insults. Pablo Luna, who worked at state oil company YPF until it was privatized in the 1990s, stood outside Congress wearing a helmet with the YPF logo. He held a banner that said “Our homeland is not for sale, we must defend it.”

“I was affected by Carlos Menem’s neoliberal politics in the 1990s, we’ve already gone through this,” he said. “I don’t want history to repeat itself, it hurts.”

The vote in the Senate took place two weeks ago amid protests that ended in a violent police crackdown in which 33 people were arrested, accused of participating in an attempted coup. Five remain detained, albeit with other charges. 

“Every time we have protested, we have done so peacefully. We’ve never had any issues before,” said Melisa Gómez, a union representative of the Paper Industry Workers Federation in the square. “The people who have been unfairly detained should be released, and we should be free to protest peacefully. The square is all fenced off, this wasn’t common before.”

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