Frenetic negotiations are under way in Argentina’s opposition-dominated congress as libertarian president Javier Milei seeks to push through his ambitious reform agenda while lashing out at lawmakers with key swing votes.
Milei, whose party holds only a tiny minority of seats in the legislature, has moved at unprecedented speed to capitalise on what analysts predict will be a brief honeymoon period amid Argentina’s severe economic crisis.
He has put forward more than 1,000 rule changes via a sweeping emergency decree issued last month and a proposed “omnibus law”. These aim to deregulate industries, expand presidential powers, reduce the right to protest, and deliver spending cuts and tax increases central to Milei’s plan to eliminate the fiscal deficit this year.
Both the decree and law face congressional oversight in the coming days. Yet the president, who took office in December, has taken an intransigent tone towards the opposition, saying he “will not negotiate” on the bill or decree and accusing lawmakers who challenge them of “looking for bribes”.
“The harm that the population could suffer depends on congress, on if they do things well or dedicate themselves to destroying Argentines’ lives,” Milei warned in a radio interview on Sunday.
At the same time, congressional leaders from his La Libertad Avanza coalition (LLA) are demonstrating a more pragmatic approach, said Alejandro Cacace, parliamentary secretary for the centrist bloc Union Civica Radical (UCR).
“Moments of dialogue are becoming possible,” he said.
To pass Milei’s raft of changes, the government needs to win over several dozen legislators from the UCR and other centrist or independent blocs. Together, LLA and its loose ally, the rightwing PRO, hold just 75 of 257 seats in the lower house and 13 of 72 in the senate.
Large left-leaning Peronist blocs in both houses have vowed to reject most measures Milei has proposed.
The lower house of congress began debating the omnibus bill last week. Milei hopes to hold a vote there as early as next week, after he returns from the World Economic Forum in Davos, where he is due to speak this Wednesday.
Measures seen as controversial by the centrist parties include proposals to end automatic pension increases; raise taxes on agricultural companies and other exporters; and delegate broad legislative powers to the president in energy, tax, pensions, security and other areas, in effect until the end of Milei’s term in 2027.
Cacace said recent conversations led him to believe they could reach an agreement on those issues with LLA, including “a reduction in the time period, topics and scope” of the legislative powers and “a temporary and more reasonable” scheme on export taxes.
An LLA source in the lower house said leaders there had accepted that the pension reform was “unlikely to pass” as written, despite Milei’s attitude, and were “frenetically negotiating” to satisfy potential allies.
“It’s one thing to be president, but congress is a totally different world,” they added. “The offices of our leaders here look like subway stations, there’s so many people coming and going to talk.”
Officials have also agreed to rewrite articles deregulating the fishing and biofuel sectors after criticism from industry bodies, and scrapped an article that defined protests — for which the government wants to require organisers to notify authorities in advance — as any public gathering of three or more people.
However, Germán Martínez, leader of the 102-strong Peronist bloc Unión por la Patria in the lower house, said such concessions were window dressing “to distract” from the “true authoritarian core” of the bill.
“The president wants to be able to exercise absolute power without any counterweight from congress,” Martinez said.
He added that he expected that his party would be able to win over the 27 colleagues they need “to stop the bill from being approved or at least dramatically scale back its scope”.
An even fiercer battle is brewing over Milei’s emergency decree, which entered into force in late December.
It strikes down or modifies major regulations governing imports, exports, the housing market, food retailers, pharmaceutical and healthcare companies, airlines and more. The decree will stay in effect unless both houses vote to reject it; legislators will be free to call votes to do so from January 19.
Milei has argued that Argentina’s economic crisis, in which annual inflation topped 210 per cent in December, constitutes an emergency that justifies the decree.
Under Argentina’s constitution, such decrees are reserved for situations when “exceptional circumstances make it impossible to follow ordinary procedures”.
Lucila Crexell, a senator for Neuquén province from the centrist bloc Cambio Federal, said the decree included issues “that are clearly not urgent”, such as an article that would open the door to the privatisation of football clubs.
“The decree is a tremendous affront to the republican, representative, federal system established in our constitution,” she added.
The UCR has called on the government to introduce a “mirror bill” to congress, or for the decree to be withdrawn and replaced by many mini-decrees so lawmakers can vote on individual changes.
So far the government has rejected those requests, demanding an all-or-nothing approach.
“If they remain locked in this arrogance, and refusal to generate dialogue, then I think this is the start of a crisis for the government,” Crexell said.
The decree faces a wave of legal challenges in federal courts. Judges have already suspended a major section deregulating the labour market after several unions filed for injunctions on grounds it was unconstitutional.
Argentina’s powerful General Federation of Labour called a general strike for January 24 to protest against the decree.
In December, Milei said that if congress struck down the decree, he would call a non-binding referendum, “so then [lawmakers] can explain to me why they’re against the people”. He has cited his 56 per cent vote share in November’s run-off election as a mandate for rapid change.
Calling a referendum would amount to “a declaration of war” against legislators, said Ignacio Labaqui, a Buenos Aires-based senior analyst at advisory firm Medley Advisors.
He said the coming days would make clear if Milei’s strategy “is to ask for a lot in the hope of pushing through 30, 40, 50 per cent” of his proposals, which could prove successful, or “if he really is playing chicken with congress, which I think ends badly for the government”.
“The fate of the government depends on which kind of game he wants to play,” he added.
