Argentina Passes Emergency Economic Law to Increase Taxes

RIO DE JANEIRO, BRAZIL – The Argentine Senate passed the economic emergency law. Cristina Fernández de Kirchner, vice-president and, as such, president of the Senate, made her debut in a hectic evening session that ended minutes before 4 am on Saturday.

The package of measures proposed by Alberto Fernández’s government, with strong tax increases and a six-month freeze on pensions, except for the lowest, received the support of 41 senators, with 23 votes against and one abstention.

In order to implement the law, the government had to commit to making future changes. Privileged pensions under extraordinary regimes, such as those received by judges and diplomats, had been exempted from a freeze after the bill was passed by the Chamber of Deputies.

This was qualified as discriminatory by the opposition and some Peronists. The Rosada House announced that in the coming days it will prepare a bill to end these privileged pensions and called on Congress to work exceptionally in January, usually a holiday month, to standardize the retirement system. Employee and faculty pensions have also been kept out of the freeze.

There was anticipation to see how the ex-president of the Republic would act at the helm of the Chamber.

Cristina Kirchner was cordial, greeted the vice-president of the Senate, Martín Lousteau, who was her minister of economy and with whom she broke off relations (Lousteau is now aligned with the opposition), and twice reprimanded the leader of her own party’s bloc, José Mayans, for referring to her as “president”. “President, ta, ta, don’t be chauvinistic,” she said.

The session was expected to begin at 2 pm, but the government’s need to introduce the changes agreed in the Chamber deferred the session to 7:30 pm. One such modification was the establishment of a Solidarity Fund for the benefit of small farms, to partially offset the increase in tax withholdings imposed on all exporters of agricultural products.

The head of the opposition bloc ‘Together for Change’, Luis Naidenoff, announced the coalition’s vote against the bill because it concealed “a brutal adjustment with two components: taxes and, essentially, the elimination of the purchasing power of retirees”, he said.

Peronist Senator Jorge Taiana accused the opposition of wanting to reject “the severity of the situation the Republic is experiencing,” due to the deep economic crisis left by Mauricio Macri’s administration. He said what they did by substantially increasing foreign debt was a “betrayal of the homeland,” and stated that the adjustment measures and the new taxes, among them those that tax 30 percent on the acquisition or use of dollars, were strictly necessary.

The package of emergency measures was passed by the Chamber of Deputies and the Senate in only 72 hours. It will come into effect on Monday.