(Bloomberg) — President Javier Milei on Monday vetoed a bill that would force Argentina’s government to increase pension benefits, highlighting growing tensions between his libertarian party and its allies in an opposition-controlled Congress.
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The bill, aimed at compensating retirees for January’s 25.5 percent monthly inflation, won approval by two-thirds majorities in both houses before reaching Milei’s desk. The large vote margins mean Congress is likely to override the presidential veto in the coming weeks.
All but one senator from PRO, the business-friendly party founded by former President Mauricio Macri, joined the chamber’s moderate and left-wing segments to expand pension payments in a 61-8 vote. The remaining PRO senator voted with the seven libertarians in the upper chamber to reject the measure.
Macri has criticized his lawmakers’ anti-austerity votes and last week signaled support for Milei’s veto. But tensions have grown within PRO ranks in recent months as some lawmakers seek to deepen ties with Milei’s libertarian party and others — including Macri — press their differences.
Last month, lawmakers in the lower house, including several PRO members, rejected Milei’s executive order to increase the national intelligence budget. The Senate has yet to muster enough votes to overturn the measure.
The pension law would cost the equivalent of 1.02% of gross domestic product this year and 1.64% of GDP next year if it were to go into 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.
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