The heterogeneous Argentine opposition united for the first time in Congress to deal a setback to the Government of Javier Milei. In the early hours of this Wednesday, the Chamber of Deputies approved by 162 positive votes, 72 negative and eight abstentions a bill to replace the formula for updating pensions decreed by Milei. The initiative, which must also receive the support of the Senate to come into effect, represents an 8% increase in pensions resisted by the Government in the interest of fiscal balance. As soon as the result of the vote is known, Milei expressed her frontal opposition through social networks: “I will defend the box with a pure veto if necessary. “They impoverished the country through pure deficit, so in no way am I going to allow this to be repeated.”
“It will be difficult for the president to reject a law voted with 2/3 of the votes,” replied national deputy Martín Tetaz. In the event of a presidential veto, the Argentine Constitution provides that the Legislative Branch can repeat the vote. If two-thirds of each chamber supports the law, it becomes firm.
The political tension is maximum. The ruling party, La Libertad Avanza, is in the minority in the Senate, with only seven of the 72 seats. There he has assured the support of the six Pro legislators who respond to former president Mauricio Macri, but the number is still far from the majority to prevent an adverse result. If the alliance of the Lower House is repeated, the opposition will have more than enough votes to approve it: only between the Radical Civic Union (UCR), promoter of the law, and Peronism there are 46 legislators. The historical rivalry between these two political formations seems momentarily put on hold to reduce the impact of Milei’s adjustment.
Smear campaign
Aware of the difficult scenario, the president is leading a smear campaign against opposition politicians, whom he has once again compared to rats through a drawing created with artificial intelligence. The ultra leader accuses the opposition of “putting spokes in the wheel” of his economic program and blames them for the incipient signs of distrust emitted by international markets. “A part of Congress shows a systematic desire to destroy the fiscal balance, which leads to the loss of value of the bonds and thus increases the country risk and the interest rate,” Milei wrote on X (formerly Twitter).
According to the Congressional Budget Office, the pension update formula proposed by the UCR has a fiscal cost of 0.43% of Argentine GDP. If approved, it would detonate the surplus in public accounts achieved by Milei at the cost of cutting pensions, salaries and public works, but it would mean some relief for the pockets of older adults. Today, the minimum pension in Argentina is equivalent to about 225 dollars at the official rate (206,931 pesos), to which is added a compensatory bonus for another 80 dollars more. The figure represents less than half of what a retiree needs to cover their basic basket, according to data from the Ombudsman’s Office for the Elderly.
The president has anticipated that he will maintain the planned economic course no matter what happens, convinced that the population supports him, as shown by the polls, which give him a positive image close to 50%. “Every time the degenerate fiscal politicians of politics want to go and break the fiscal balance, I am going to veto everything, I don’t give a damn,” Milei said at the Latin American Economic Forum. If the Executive Branch refuses to accompany him now, the president trusts that Argentines will take revenge at the polls in the mid-term legislative elections: “What the old politics proposes has been failing for a century and is what we have come to change. And we are going to change it, today or from December 11, 2025.”
Senators will be under great pressure in the coming days. The Government will do everything possible to prevent the increase in pensions from going ahead, but its main objective is for the Upper House to approve the State scrapping law that already has the approval of the Chamber of Deputies. It is a smaller version—and divided into two—of the mega law that Milei presented at the beginning of his mandate, last December. The Government has made new concessions to secure the necessary votes in the vote, scheduled for next week. If an affirmative result is obtained, due to these changes, he would return to the Lower House.
The Argentine opposition is at a crossroads. The Government hides behind them to blame them for all the problems of the Argentine economy and thus avoid any self-criticism for the management errors committed in recent months. Even so, many senators are reluctant to give him the tools he requests, especially delegating legislative powers to Milei for a year, approving a regime of incentives for large companies that favors them for 30 years to the detriment of national industry, and authorizing a increasing taxes on workers while lowering, on the other hand, those who pay for assets (known in Argentina as personal assets).
The Government tried to bring calm to the markets with a very optimistic story. “The worst is over and we are clearly recovering,” said Economy Minister Luis Caputo. “We went from a 5-point deficit to a fiscal surplus in one month, a trade surplus, a current account surplus, and we reached single-digit inflation in April.” The message was received coldly: the Argentine country risk once again exceeded 1,500 points and sovereign bonds opened lower for the second consecutive day.
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