(Bloomberg) – Argentina’s lower house has confirmed the president Javier Miley‘s omnibus and tax bills, first in whole and later in parts, a major victory for the libertarian leader, whose reforms now face a tougher fight in the Senate.
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House officials agreed Tuesday that Milei should have expanded his executive powers over administrative, financial, economic and energy matters, as well as the ability to dissolve dozens of federal government special funds. They also allowed the privatization of nearly a dozen companies, including the airline Aerolineas Argentinas, public utilities, rail and postal service providers, as well as the expansion of the income tax base.
In February, lawmakers rejected Milei’s proposals on energy powers and eliminating the funds. This time he managed to negotiate bipartisan support and withdrew a security proposal that had also been rejected – a sign of his growing pragmatism.
After each of its dozens of chapters were individually approved, the 232-article package was sent to the Senate, where it faces its toughest fight yet. The upper house, where Milei’s nascent Libertarian Party holds just seven of 72 seats, dealt the president a harsh blow by rejecting his signature executive decree in March.
If successful, Milei will have more power to lay off state workers, cut expensive subsidies and eliminate costly government agencies to balance the country’s budget – and demonstrate his political prowess to investors.
“This is a fundamental first step to free Argentina from the quagmire of the last decades,” the president wrote on X after the vote.
Milei also won approval for labor reform, which he believes is essential to encouraging companies to hire workers. The proposal would extend the probationary period before hiring a worker on a full-time contract and eliminate penalties for companies that try to register informal workers, who make up about half the workforce.
With the help of his sister Karina – a top adviser whom the president refers to as “the boss” – and Interior Minister Guillermo Francos, Milei managed to successfully navigate a congress controlled by the opposition. With just 15% of the seats in the lower house, he built bridges with the pro-business PRO party and more moderate members of two other political groups, Union Civica Radical and Hacemos por Nuestro Pais, to push his signature bill through.
To get this far, he had to make important concessions that went beyond scrapping the proposal for expanded security powers. In the original version of the bill, Milei sought to privatize 41 companies, including oil giant YPF SA, and increase export tariffs. The bill now contains just over 200 articles, a significant reduction from over 600 in the first version.
Milei introduced the original package in December. As negotiations began, he gradually removed the most controversial tax increases and privatizations from the legislation. Yet lawmakers still rejected key articles of the proposal in the first vote, prompting the president – straight from Israel, where he was on an official trip – to order his party to withdraw it from the lower house.
After the passage of the omnibus bill, the lower house adopted Milei’s tax package, which provides for an expansion of the income tax base and encourages the declaration of taxable assets abroad.
At an event at the Buenos Aires Stock Exchange on Monday evening as the debate dragged on, Economy Minister Luis Caputo said the bill was important for local business leaders and investors abroad and to ease the harshness of Milei’s budget cuts for everyday Argentines, but stood by it Fate would not affect his economic plan.
“However, this is not a prerequisite for fiscal austerity,” Caputo said. “We will never abandon this commitment.”
(Updates with full approval of collection and tax bills in the House of Commons.)
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