Having tried and failed last week to have the Lower House approve a contested pension reform, the government will give it another go today armed with a renewed political support agreement from governors keen on seeing the fiscal pact implemented and the promise of a one-off payment to pensioners to offset losses in the transition to a new system.
While opposition to the bill remains stiff, assurances from the Justicialist caucus and the lawmakers from provincial parties that are politically aligned with governors that they will vote for the bill has left the government feeling confident that the second attempt will prove successful. Those assurances are critical for the government’s ambitions as the Justicialist caucus was largely absent on Thursday in the Lower House, hampering the Cambiemos coalition’s ability to get the quorum to get the session rolling. Cambiemos has also reminded the governors that it considers the pension reform part of a package that includes a fiscal agreement that the provinces are also very much in favor of.
Adding up the Cambiemos caucus and the circumstantial allies that the government is relying on, the number of lawmakers voting in favor of the bill will be in the range of 140 to 150. Hinting at the outcome of the vote, quorum was reached in the Lower House soon after the official start of the session, setting the stage for hours od debate on the floor. Outside, police and protesters are clashing.
After the fracas inside and outside Congress last week, in which the session was called after after Cambiemos was unable to decisively reach the necessary quorum in order to proceed to a vote, a Friday meeting with the governors seems to have broken the deadlock and tilted the balance of power in the government’s favor. One of the sticking points had been the reduced adjustment that pensioners could expect in March 2018 if the reform went through. As such, Friday’s meeting between governors resulted in a promise from the government that it would pay a one-time bonus in March to pensioners with a pension of less than 10,000 pesos and for beneficiaries of the Universal Child Allowance (AUH).
For PRO lawmaker Luciano Laspina, that bonus “resolves the shift from a semi-annual he system to a quarterly system and the lag in the adjustment of pensions.” Entre Ríos Governor Gustavo Bordet said after the Friday meeting that “this agreement satisfies the requests that were being put on the table and sets up good chances for the approval of the law on Monday. Pensioners won’t lose a penny.”
According to the governors and government, the bonus will be made available to roughly 70 percent of pensioners, or about 9 million people, and will total 4 billion pesos.
Agustín Rossi, head of the Victory Front in the Lower House, was unimpressed with the one-off payment. “It’s a farce, a new affront to pensioners and retirees as a whole,” he said in conversation with FM La Patriada. Rossi estimated that the bonus would amount to “700 pesos for those who earn less than 10,000 pesos and 35 years of pension contributions, and 315 pesos for those 30 years of contributions and a pension that is worth less than 10,000 pesos. They’re going to give 500 pesos to AUH beneficiaries.”
With Kirchnerites, the Renewal Front and the left all maintaining their opposition to the bill, it now remains to be seen if the government’s calculations are correct and if indeed they get the necessary votes that evaded them on Thursday. As a backup, the government has already promised to set into motion its decree adjusting pensions if Congress doesn’t approve the bill.