Javier Milei overcomes first obstacle in Congress to his mega-reform bill

The House approves a draft with only half of the original measures, but Senate approval is needed to pass the law

Argentinian lawmakers attend a debate on Argentina's President Javier Milei's economic reform bill, known as the 'omnibus bill', at the National Congress, in Buenos Aires, Argentina, February 2, 2024
Argentine legislators debate President Javier Milei's reform bill; Buenos Aires; February 2, 2024.AGUSTIN MARCARIAN (Reuters)

President Javier Milei won his first legislative victory on Friday, February 2. After three days of intense debate and tense street protests, the House of Representatives voted in favor (144 for and 109 against) of Milei’s mega-reform bill to dismantle much of Argentina’s government apparatus. But it was a bittersweet victory as almost half of the original 664 articles in the bill had to be scrapped to gain the necessary support. More concessions may be required, as some of the most controversial measures regarding the delegation of legislative powers and privatization of state-owned enterprises will be voted upon individually in the House on February 6. Once the marathon congressional session ends (one of the longest in the history of Argentina’s democracy), the bill will go to the Senate for a vote.

“It’s time for the people’s representatives to choose between supporting the freedoms of the Argentine people or favoring the privileged elite and the corporate state,” Milei posted on social media during the final stretch of the debate in Congress.

Milei’s La Libertad Avanza party (Freedom Advances, in English) has only 38 of Argentina’s 257 House representatives, but has allied with former president Mauricio Macri’s PRO party, which has 37 representatives. The other votes in favor of Milei’s bill came from the center-right UCR party, legislators from regional movements, and Peronist representatives peeled away from the UxP coalition’s 99 seats in the House.

National Congress, in Buenos Aires, Argentina, February 2, 2024
Vote tally for President Javier Milei's omnibus bill at the National Congress; Buenos Aires; February 2, 2024.AGUSTIN MARCARIAN (REUTERS)

After the House’s general approval of the massive omnibus bill, Milei’s congressional allies will now work against the clock to gain support for the more conflictive points that have yet to be approved. After campaigning on a promise to lower taxes, in late January Milei jettisoned tax reforms in the omnibus bill that included tax hikes on exports and on high-income individuals. He also abandoned changes to the pension system that would reduce the purchasing power of retirees. The package of fiscal measures will be discussed separately with the provincial governors.

Milei also had to give up his attempt to obtain emergency legislative powers for his entire presidential term. The omnibus bill originally proposed granting these powers for two years, with the potential of extending them for another two. However, the approved draft reduced the period to one year, with the option for extension. Granting such powers will require a vote in a Congress leery of a president who has vowed to minimize the government’s role in Argentina.

There are differing opinions when it comes to privatizations. Milei wants to privatize all state-owned enterprises, a move that would be very unpopular. Surveys indicate that over 60% of the public opposes this idea and believes that there should be exceptions. The initial list of 47 companies to be privatized has been dropped to 27, and does not include YPF (state-owned oil company) and other well-known organizations. There is also potential for partial privatizations of some companies.

There is also no consensus on the government’s authority to assume foreign debt or on the stricter security policy advocated by Security Minister Patricia Bullrich. Milei wants more foreign debt flexibility and seeks to bypass Congress for loans like the one former President Macri obtained in 2018 from the International Monetary Fund (IMF). Argentina still owes $44 billion from that loan.

The congressional debate of the omnibus bill is happening in special sessions during the summer holidays. Milei wanted to get it approved in two weeks, but the deadline was extended after pushback in Congress. The debate began on January 31 and ended at midnight. The session was resumed at noon on February 1 and again debated for 12 hours. As riot police protected the National Congress from street protestors, the marathon session resumed at 10am on February 2.

Argentina's President Javier Milei's economic reform bill
Argentine congressional representatives celebrate after giving overall approval President Javier Milei's omnibus bill; Buenos Aires; February 2, 2024.AGUSTIN MARCARIAN (REUTERS)

Police repression

Outside the National Congress, demonstrators protested the omnibus bill day after day. Security forces were deployed on January 31 to control thousands of protesters attempting to block the surrounding streets. Tensions grew the next day, when security forces began shooting rubber bullets at the protestors. Over 20 journalists were hit by the rubber bullets and at least eight protesters were arrested. Seven police officers were also injured, according to government sources. Some left-wing and Peronist legislators left their seats in Congress to join the protestors.

The Ombudsman for Buenos Aires decried “the institutional violence” and pressed prosecutors to halt a “repressive operation that violated the Public Security Law,” which accords certain rights to public demonstrations. Security Minister Patricia Bullrich dismissed these claims, saying the incidents had not been “serious.” She also asked journalists to wear badges when covering demonstrations “because otherwise we don’t know.” The president’s spokesperson, Manuel Adorni, congratulated the police force for undertaking a “titanic” effort. “We are only doing what’s appropriate. We won’t allow a small group of violent people to stop the debate,” he said at the press conference.

On February 2, the protesters returned to the square in front of the National Congress waving banners that said, “Thousands of us are everywhere, shouting enough is enough!” Despite the scorching heat in Buenos Aires, hundreds of protestors continue to gather, including union, political and cultural groups. There were bands playing music and people jamming the streets in their cars, motorcycles and bicycles. “We don’t want to make Minister Patricia Bullrich mad, so get creative!” said protest organizers in response to Bullrich’s crackdown over the past two days.

Police officers detain a demonstrator during a protest as lawmakers debate on Argentina's President Javier Milei's economic reform bill
Police arrest a protestor as lawmakers debate President Javier Milei's omnibus bill; Buenos Aires; February 1, 2024. AGUSTIN MARCARIAN (REUTERS)

Since taking office on December 10, Milei has already faced a partial strike and numerous protests. More civil unrest is expected in March when the school year begins and the effects of the country’s recession are felt more strongly. In mid-2023, four in 10 Argentines lived in poverty, and even worse official data is expected in the future. Argentina’s Inflation is skyrocketing, and is now the highest in the world, surpassing Venezuela. Prices increased by 211.4% in 2024 and will continue to accelerate due to the elimination of social welfare subsidies and deregulation in the food and fuel industries, medicine and private education.

The recent protests during a scorching heat wave are smaller compared to others in the past. Major protests erupted in 2017 against Macri’s pension reforms, and against prison benefits for people convicted of crimes against humanity during the last dictatorship. Milei has threatened that if the omnibus bill fails in Congress, his fiscal austerity measures will be even harsher, promising a $20 billion cut in public spending.

Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition

More information

Archived In

Recomendaciones EL PAÍS
Recomendaciones EL PAÍS