Milei Blocks Pension Hike but Loses Disability Battle in Congress

Argentina’s lower house delivered a mixed outcome for President Javier Milei’s austerity drive on August 20. Lawmakers failed to overturn his veto on a pension hike but succeeded in reviving a bill to protect disability benefits.

The pension law would have raised retirement payments by 7.2 percent and lifted the monthly bonus from 70,000 to 110,000 pesos. It also planned extra funding for underfinanced provincial pension schemes.

The Congressional Budget Office estimated the measure would cost 0.32 percent of GDP for the rest of 2025 and 0.78 percent if extended annually, plus an additional 0.17 percent for provincial transfers.

Deputies voted 160 to override the veto, with 83 against and six abstentions. That fell just short of the 166 needed to reach a two-thirds majority, keeping the veto in place.

The government convinced several lawmakers who had previously abstained to support Milei, allowing him to preserve his pledge to stop new spending.

The president insists Argentina must avoid any measure that risks fiscal discipline. Since taking office, he has slashed public spending to end the deficit and stabilize the economy.

Official figures show monthly inflation, once above 25 percent, fell below 2 percent by mid-2025. But the same session dealt Milei a setback.

Lawmakers voted 172 to 73, with two abstentions, to override his veto of a bill declaring an emergency for disability assistance. That measure ensures delayed payments are regularized and benefits remain available until 2027. It now moves to the Senate.

The two results show Milei’s delicate position. He has enough support to block measures that threaten his economic plan but not enough to stop Congress when social demands gain momentum.

Pensioners, whose real incomes have shrunk, hold weekly protests at Congress. Disability groups have also organized pressure campaigns, drawing support from unions and provincial leaders.

For Argentina’s midterm elections in October 2025, the message is clear. Milei presents himself as a leader ready to defend fiscal order at any cost.

His opponents portray him as blind to the human impact of cuts. The fight over pensions and disability benefits captures that clash directly.

For businesses and investors, the outcome signals a fragile but functioning balance: Milei can still enforce his program, but social and political resistance will test how far austerity can go.