Stalled Senate Update Formula Awaits Consensus on Comprehensive Reform by Victoria Villarruel

After the approval of the Bases Law and the fiscal package, Victoria Villarruel, another issue that could impact the goal of zero deficit for the Government of Javier Milei emerged. This issue is related to the new retirement formula. The vice president is delaying the treatment of this project that has already been partially approved by the Deputies. The objective is to add agreements to achieve a comprehensive reform of the pension system.

Villarruel has not given any direction to the committees of the project approved by the Lower House at the beginning of the month. Sources from the ruling party suggest that a plenary session of the Labor and Social Security committees may be convened next week to start the debate on the retirement issue. The Senate is cautious in providing a timetable for dealing with this matter, but it is expected to take several weeks.

Both chambers of Congress have agreed to postpone contentious issues during July to allow the Government to implement the recently approved rules and to address the economic challenges facing the country. The opposition blocs are also in agreement with this approach as they anticipate difficult months ahead for the second semester.

Villarruel’s office, along with their allies, is working on a plan for a comprehensive reform of the pension system to reduce political damage. The Senate has requested reports on the fiscal impact of the retirement formula. The ruling party anticipates that the cost will be higher than initially estimated in the project approved by the Deputies.

The Union for the Homeland bloc is determined to move forward with the retirement formula without modifications. In the House of Representatives, the proposal received broad support from various parties. The new retirement mobility scheme is based on the INDEC Consumer Price Index and includes an 8% increase to account for inflation.

Overall, the focus is on achieving a comprehensive reform of the pension system while addressing the economic challenges facing the country. The truce between parties allows for further discussion and debate on the retirement formula before it is fully implemented.