Congress Blocks Milei: Argentina's Austerity Drive Faces Its Toughest Test

(MENAFN- The Rio Times) Argentina's legislature has moved forcefully against President Javier Milei's economic program, raising questions about whether his strict austerity plan can hold.

Both chambers of Congress passed spending laws with wide margins, rejected presidential decrees, and overturned a key veto, leaving the president in open conflict with lawmakers.

The Senate voted 58 to 10, with 3 abstentions, to approve a law that guarantees public universities at least 1% of GDP in 2025. The law also requires bimonthly inflation adjustments and rebases budgets to reflect last year's price surge.

Senators then approved a pediatric health emergency by 62 to 8, sending new funds to children's hospitals like Garrahan and reversing a controversial change to the medical residency system.

In the same session, the Senate struck down five decrees that targeted state agencies, including the National Roads Administration, the agricultural and industrial research institutes INTA and INTI, and the National Genetic Data Bank.



These measures had been central to Milei 's effort to cut back the state and reduce costs. One day earlier, the Chamber of Deputies overturned Milei's veto of a disability emergency law by 172 votes to 73, with 2 abstentions.

Lawmakers also passed a bill requiring automatic transfers of federal funds to provinces by 143 to 90, with 12 abstentions, limiting presidential discretion over budget flows.

Milei has vowed to veto any law that expands spending. Yet the size of the Senate's majorities suggests lawmakers may have the numbers to override.

That puts the president's fiscal program, built on achieving a budget surplus to stabilize Argentina 's economy, at direct risk. The clash goes beyond political rivalry.

Public universities educate millions of students, while hospitals like Garrahan provide specialized care for children nationwide. Legislators cast their votes as defending essential institutions against cuts that, in their view, would weaken social stability.

Guaranteeing 1% of GDP for universities alone commits significant resources at a time when Milei insists every peso counts. The story behind these votes is about control.

Milei governs with a minority in both houses and faces an opposition that has found unity around social and regional spending. With two-thirds votes possible in the Senate, the balance of power has shifted away from the presidency.

That dynamic not only threatens Milei's austerity push but also creates new uncertainty for businesses and investors watching whether Argentina can keep its fiscal targets.

For now, Congress has drawn a line: the president cannot cut his way to surplus without confronting lawmakers who see education, health, and regional budgets as untouchable.

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