Milei Vetoes Argentina Pension Bill Amid Congressional Tension

(Bloomberg) — President Javier Milei vetoed a bill Monday that would force Argentina’s government to boost pension payments, laying bare growing tensions between his libertarian party and its allies in an opposition-controlled congress.

Most Read from Bloomberg

The bill, which aimed to compensate retirees for monthly inflation of 25.5% in January, gained approval from two-thirds majorities in both houses before reaching Milei’s desk. The wide vote margins mean Congress will likely overturn the presidential veto in coming weeks.

All but one senator from PRO, the business-friendly party founded by former President Mauricio Macri, joined the moderate and left-wing segments of the chamber to expand pension payments in a 61 to 8 vote. The remaining PRO senator voted with the seven libertarians in the upper chamber to reject the measure.

Macri criticized the anti-austerity votes cast by his lawmakers and signaled support for Milei’s veto last week. Tensions, however, have grown within PRO ranks in recent months as some lawmakers seek to deepen ties with Milei’s libertarian party and others — including Macri — stake a claim to their differences.

Last month, lawmakers in the lower house including some PRO members rejected Milei’s executive order to increase the national intelligence budget. The senate has yet to gather enough votes to overturn the measure.

The pension bill would cost the equivalent of 1.02% of gross domestic product this year and 1.64% of GDP next year were it to take effect, according to the veto announcement in the national gazette. That increase would make it impossible for Milei’s government to meet its fiscal targets for 2024 and beyond.