Argentina's Milei to veto pension reform, widening rift with Congress

Argentina's President Javier Milei speaks during the CPAC (Conservative Political Action Conference) in Balneario Camboriu, Santa Catarina state, Brazil, July 7, 2024. /Anderson Coelho/File Photo

BUENOS AIRES - Argentine President Javier Milei will veto a pension reform passed on Thursday by the Senate in a move that is likely to widen an ongoing rift between the libertarian leader and the opposition-controlled Congress.

The Senate had overwhelmingly agreed to hike pensions in line with the country's triple-digit inflation, which could have risked the strict fiscal balance pushed by Milei.

Milei's office said in a statement on X that the bill's "only objective was to destroy the government's economic program," as it would have required spending an extra 1.2% of the gross domestic product.

"The president promised Argentines that he would maintain a fiscal surplus at all costs, and he will," his office said.

Milei took office in December with strict austerity measures as part of a bid to tackle rampant inflation in the face of rising poverty now hitting half of the Argentine population.

Peronist center-left Senator Juliana Di Tullio, who had voted for the pension adjustment, said that "55.5% of Argentines are in poverty and 17.5% are in extreme poverty. Many of them are senior citizens."

Last week, Congress struck down a presidential decree which would have multiplied the intelligence budget, arguing those funds could be used for more urgent social needs.