200 days after Javier Milei took office and 184 days after the presentation of the original project, the ruling party achieved the final approval of the Bases Law and the fiscal packagewith the return of the income tax. In a session where there was no shortage of disagreements, La Libertad Avanza gave the green light to the first two projects of this administration, after a process with all kinds of political condiments that took six months.
The Law Baseswhich marked the debut of a minority ruling party, It was approved with the Senate’s changes and received 147 positive votes from La Libertad Avanza, the PRO, the UCR, the bulk of Hacemos Coalión Federal, Innovación Federal, the Civic Coalition, the MID and other minority blocks; 107 negatives of Unión por la Patria, the left, socialism and Natalia De la Sota from Córdoba; and 2 abstentions (Mónica Frade from the CC and Sergio Acevedo from Santa Cruz).
“It is the most important reform in history, by size. If it is the most important in history, half a year doesn’t seem like much to me. Obviously it can always be improved and it would have been better if it were earlier, but this is not a law for the Government, it is a law for all Argentines. A new stage begins,” the president of the lower house highlighted earlier, Martin Menem.
The debate was monitored from Casa Rosada, while the Secretary General of the Presidency, Karina Milei, Vice President Victoria Villarruel, the Chief of Staff, Guillermo Francos, and his second in command, José Rolandi, who became the protagonist as negotiator and writer of the fine print, paraded through Congress.
In the Bases Law, the ruling party gathered a larger majority than the last time, when it had obtained 142 votes, because radical dissidents who had previously denied support joined in, led by Facundo Manes. In this way, the changes introduced by the Senate were accepted, among which it was decided to remove Aerolíneas Argentinas, the Correo and the public media from the list of privatizations.
That was the last pruning that the Government had to accept in exchange for votes, after a truly exhausting debate where it gave up, in total, 426 articles: they went from 664 of the original project, presented at the end of 2023 by the then minister Guillermo Francos in a box closed with a bow, to 238 final articles. At the end of the debate, the president of the Kirchnerist bloc, Germán Martínez, launched a taunt showing a box like the original and a much smaller one.
In the fiscal package, meanwhile, the ruling party was able to insist on two chapters that were rejected in the Upper House: the restitution of Profits (with 136 votes in favor, 116 against and 3 abstentions, by Frade, the Santa Cruz radical Roxana Reyes and the Catamarca Peronist Silvana Ginocchio) and the adjustments in Personal Assets (134 affirmative votes, 118 negative and 3 abstentions, by Nicolás Massot, Margarita Stolbizer and Frade).
On the contrary, it was not possible to revive an article that urged the Executive Branch to propose a 2% cut in the State’s tax expenditure. Two-thirds of the votes were needed because the Senate voted with that majority, but in the Deputies there were 148 votes in favor and 107 against. The key was the rejection of Unión por la Patria.
The rest of the modifications to the tax chapter (such as the prohibition of entry of foreigners to money laundering and the limitation of the sectors that can access the benefits of the Regime of Incentives for Large Investments) were accepted with 144 endorsements, 108 rejections and 3 abstentions.
The biggest challenge for La Libertad Avanza was the Income Tax, a tax that Milei rejected as a deputy and now, as president, he wanted to reinstate to oxygenate the national and provincial coffers. Throughout the day, the issue generated tension because the counts showed a tight number, but the government finally not only secured approval, but did so with four more votes than in the previous round, which had seen 132 votes.
As in the Senate, the resistance of Patagonians (the region where the measure would have the most impact on salaries) was felt. “As a union member from Chubut I cannot let the oil workers pay profits. I cannot allow it under any circumstances. This tax will greatly harm the social peace of the oil basins. We are going to fight it: as soon as we have the first profit discount we are going to stop all activity in the country,” threatened the Hacemos deputy Jorge Ávila, who reports to Governor Ignacio Torres.
Added to this was a group of radicals without obedience to governors, who at the end of April supported the return of the tax but now resisted voting for it. These legislators conveyed to Francos, in a meeting held this Wednesday, the discomfort of voting for Profits when the municipalities governed by radicalism would not be receiving funds from their respective governments.
That was the proposal that Karina Banfi (Buenos Aires), Pablo Cervi (Neuquén), Francisco Monti (Catamarca), Gabriela Brouwer de Koning (Córdoba) and Roxana Reyes (Santa Cruz), among others, took to the Casa Rosada.
Monti was one of those who urged his Peronist peers, who respond to Governor Raúl Jalil, to contribute to the return of Ganancias, since the first time they only guaranteed one positive vote and three abstentions. “I want to ask the deputies of my province to wear the Catamarca shirt to recover the health of public finances,” encouraged the deputy in the room.
Miguel Pichetto expressed the same opinion at the end of the debate. “The governors of Unión por la Patria must be very attentive to this process,” said the leader of Hacemos, who staunchly defended the return of Ganancias and criticized the senators, representatives of the provinces, for having turned the chapter around.
The debate in the session had two marked aspects. One was the constitutional discussion about the possibility of reviving articles rejected in another Chamber. “Beyond appearances, there is no genuine constitutional debate here: a constitutional interpretation is used to cover up political interests, a game of tug-of-war, confusion and conceptual stretching,” denounced libertarian José Luis Espert after an extensive argument in favor.
The other axis of the debate was the impact that the return of the Income Tax and the changes in Personal Property Tax will have. From Unión por la Patria, a deputy of the governor of La Pampa Sergio Ziliotto, Ariel Rauschenberger, warned: “They want us to believe that the fiscal package benefits the provinces, that the governors are asking for it, that this will contribute to improving the fiscal situation and that it will increase co-participation, but it is an absolute fallacy.”
According to the legislator, “the fiscal package not only does not increase revenue, but it complicates the finances of the provinces, the Nation and the municipalities. Restoring Profits to workers and lowering Personal Assets to the most powerful affects the fiscal surplus, which is fictitious, but a surplus nonetheless.”
There were also opinions for and against the RIGI, and Carlos Gutiérrez ( Hacemos ) from Córdoba took the opportunity to demand a nod to the field: “The investments proposed in the context of the RIGI are welcome, but it has to be complemented. The RIGI that is symbolized in the Dead Cow has to be complemented with the ‘living cow’, which has suffered 20 years of the plundering policies of Kirchnerism and is one of the most dynamic subjects of capitalist development.”
On the contrary, the one who dedicated himself to criticizing the RIGI was Máximo Kirchner, who broke the silence in the room. He warned that the regime is designed for 30 years and “far exceeds the mandate of the current president.” “I hope we all understand that the RIGI is too much, that we have to have a strategic view to not be like the Congo,” he stressed.
Over the course of six months, the debate on the Ley Bases went through all kinds of vicissitudes, from complaints of “buying” votes and alleged irregularities in the parliamentary process to an ejected head of the official bloc (Oscar Zago, who was replaced by Gabriel Bornoroni) and the resignation of Nicolás Posse as Chief of Staff, to which was added the frustrated May Pact due to the obstacles in the Senate debate.
