Milei’s radical overhaul advances in Argentina’s Senate as protesters clash with police

By ISABEL DEBRE
Associated Press

BUENOS AIRES, Argentina (AP) — Argentina’s Senate began what’s likely to be an all-night voting marathon on the details of President Javier Milei ‘s sweeping proposals to slash spending and boost his own powers early Thursday, shortly after giving the plan overall approval in a narrow vote as thousands of protesters clashed with police outside.

Senators voted 37 to 36 late Wednesday to give provisional approval to the two bills after a daylong heated debate while thousands of protesters poured into the streets, burning cars and throwing Molotov cocktails as hundreds of federal security forces pushed back with rounds of tear gas and water cannons.

The vote — decided by a tiebreaking vote from Vice President Victoria Villarruel — delivered a major boost to Milei, whose efforts to overhaul the government and economy have run into tough resistance in Argentina’s opposition-dominated Congress.

“Tonight is a triumph for the Argentine people and the first step toward the recovery of our greatness,” Milei posted on X, calling his bills “the most most ambitious legislative reform of the last 40 years.”

But critical elements of the wide-ranging legislation still have to survive an article-by-article vote in the Senate. After that, the bill heads back to the lower house, where lawmakers must okay any modifications before Milei can officially claim his first legislative victory.

Right-wing and left-wing lawmakers have clashed over various parts of the 238-article state reform bill, including the declaration of a one-year state of emergency and delegation of broad powers to the president in energy, pensions, security and other matters until the end of Milei’s term in 2027.

Other controversial measures include an incentive scheme that would give investors lucrative tax breaks for 30 years.

Milei is a political outsider with just two years’ experience as a lawmaker, and his 3-year-old party, Liberty Advances, holds just 15% of seats in the lower house and 10% of the Senate.

He has been unable to pass a single piece of legislation in his six months of presidency, raising questions about whether he can execute his ambitious project to trim the deficit and spur growth. Instead, he’s used executive powers to slash subsidies, fire thousands of public employees, devalue the currency and deregulate parts of the Argentine economy.

The spending cuts and currency devaluation that Milei has delivered have — at least in the short term — deepened a recession, increased poverty to 55% and sent annual inflation surging toward 300%.

“If this law passes, we are going to lose so many of our labor and pension rights,” said 54-year-old teacher Miriam Rajovitcher, protesting ahead of the vote alongside colleagues who say they’ve had to reconfigure their lives since Milei slashed school budgets and devalued the currency. “I am so much worse off.”

Analysts say the promised benefits of Milei’s reforms — a stable currency, tamer inflation, fresh foreign investment — won’t materialize without a political consensus to convince foreign investors that his changes are here to stay. Milei’s administration has said it wants to strike a new deal with the International Monetary Fund, to which Argentina already owes $44 billion.

“Everyone is in a wait-and-see mode,” said Marcelo J. García, Americas director at geopolitical risk firm Horizon Engage. “Investors say, ’Yes, we love what you’re saying, but we need to see that this is sustainable.”

Milei’s allies said they had made tough concessions Wednesday. His party, Liberty Advances, agreed not to sell off the country’s post office, flagship airline Aerolíneas Argentinas, or the public radio service, leaving just a handful of state-owned firms, including Argentina’s nuclear power company, on the block for possible privatization.

Milei’s original pitch late last year to privatize more than 40 state-owned Argentine companies prompted an uproar from the country’s powerful Peronist-dominated labor movement.

That was audible ahead of the Senate vote Wednesday in downtown Buenos Aires, as bankers, teachers, truckers and thousands of union members and activists converged around Congress. They chanted: “Our country is not for sale!”