What Milei is looking for with its legislative reform project and what will happen if it fails

The Argentine Chamber of Deputies will discuss this week a bill promoted by President Javier Milei that includes a wide range of economic, administrative, criminal and even environmental reforms that have been questioned by opposition parties, unions, human rights groups and artists.

The initiative was enabled to be debated in the lower house after the ruling party obtained a favorable opinion in the commissions that analyzed it during January, but the result of the vote is uncertain because the ruling party is the third force in Parliament and needs the vote of allies in the opposition to obtain approval. If he gets it, his debate will continue in the Senate.

The government considers this initiative as the founding basis of its political project, which has as its primary objective a total deregulation of the economy and limiting State intervention. He affirms that without this regulatory tool, Argentina will not be able to reverse its economic sufferings and will head towards hyperinflation with unpredictable social costs.

For its part, the opposition is reluctant to approve the project as it was sent by the Executive Branch because it considers that many of the reforms are not viable or require further discussion.

If the initiative promoted by Milei, an ultra-liberal economist who became president on December 10, fails, the setback will expose his political weakness and give a bad signal to the markets, which are especially attentive to the progress of his government after two almost uninterrupted decades of populist leaders.

What is the project about

The project of the “Law of Bases and Starting Points for the Freedom of Argentines” – or “Omnibus Law” due to the large number of areas on which it legislates – is part of the package of measures adopted by Milei shortly after taking office to immediately attack the fiscal deficit and straighten the economy, affected by inflation of more than 211% annually and a drop in activity.

In general terms, the initiative contemplates the delegation of powers to the Executive Branch on economic, financial, fiscal, security, tariffs, energy and administrative matters for one year and extendable for another two. There are chapters that establish harsher penalties against street protests that affect the normal operation of transportation or public services and propose more permissive legislation for security forces in cases of legitimate defense.

It also promotes the privatization of public companies, cuts funds for film production and culture, deregulates tourism activity and the publishing industry, legalizes the resale of tickets for sporting events, authorizes public universities to set fees for non-resident foreigners and makes it more flexible legislation on environmental matters.

What does this initiative symbolize?

According to political analyst Lucas Romero, from the consulting firm Synopsis, the text “contains urgent and necessary measures of the economic program, but also a large number of less necessary measures” with which Milei intends “to refound a new Argentina.” He considered that it is part of a presidential strategy “to build a story that gives greater political legitimacy to the feat that he is wanting to undertake at the beginning of his mandate,” consisting of changing the current paradigms to get the country out of the crisis.

Why is the vote delayed?

Although its ambition was to have the law in January, the government is not guaranteed enough votes and negotiations continue with more dialogue-oriented opposition blocs, since it is flatly rejected by the left and Peronism that responds to former president Cristina Fernández de Kirchner (2007-2015).

Forced to give in, in recent days the Executive introduced modifications to the heart of the original project because it generated strong rejection among the provincial governors, to whom the deputies respond: it reduced the term for the delegation of legislative powers, it excluded the oil company YPF from the list of companies that he wanted to privatize, he withdrew the fiscal chapter that established the increase in taxes on grain exports and the elimination of the formula for updating pensions due to inflation and gave up on a reform of the electoral system.

For its approval, the ruling party needs at least 129 votes out of a total of 257 deputies.

What would the shipwreck of the law mean for deputies?

Analyst Romero said that having taken office less than two months ago, Milei is in the most opportune moment to make difficult decisions. “If she cannot take them now, if her popularity begins to decline and social ill humor begins to grow, we could be entering a terrain of political instability.”

What is the deadline for processing the law?

In principle, Congress can debate it until February 15, which is the period of extraordinary sessions called by the government. That limit is fickle as it can be extended until the end of that month.