Argentina's Congress Passes Some of Milei's Deregulation Reforms. Will the Senate Support Them?

Four months after taking office, Argentine President Javier Milei achieved his first victory in Congress with a scaled-down version of his ambitious reform package. Now, the president seeks its approval in the Senate.

After a grueling session that took over 24 hours, the Chamber of Deputies approved Milei’s reform package with 142 votes in favor, 106 against, and five abstentions on Tuesday. 

“This is a first fundamental first step to remove Argentina from the swamp it has been in the last few decades,” the president wrote on X (formerly Twitter) after the vote.

Milei introduced the reform package—commonly referred to as the omnibus bill—in December with the aim of deregulating Argentina’s crippling economy. But the bill was rejected by Congress in February and Milei was sent back to the drawing board. 

With only a minority of support in Congress, the president had to negotiate and make concessions with the opposition to secure the bill’s passage. Congress then voted on each individual article included in the package, reducing its scope from over 600 articles to just 232. 

One key measure included in the package would grant Milei a year of “public emergency in administrative, economic, financial, and energy matters,” giving the executive branch the authority to make sweeping changes to the country’s legal structure. Those opposed “warn that it enables the modification or elimination of jurisdictions, functions and sweeping powers to control the number of employees at decentralised government bodies,” though proponents of the article point out that previous heads of state were granted similar powers.

Milei will also be able to privatize almost a dozen state-owned companies, including the national airline Aerolineas Argentinas, the water utility firm Agua y Saneamientos, and companies managing train and postal services. Nucleoeléctrica, the company that oversees Argentina’s power plants, will undergo partial privatization. This is a stark reduction from Milei’s original proposal to privatize 41 state-controlled firms. 

The package also retains new labor laws, extending trial periods for new hires and reducing penalties for employing unregistered workers. It introduces a “severance fund” to replace the existing severance pay system and revises retirement benefits. 

Additional measures include a new money laundering law, adjustments to maternity leave, and incentives for foreign investment through tax, customs, and foreign exchange benefits. 

Now the package is set to move on to the Senate, where lawmakers will also review each article individually. Despite the momentum, Milei is expected to face an even bigger challenge, since his party, La Libertad Avanza, holds only seven of the 72 seats in the Senate. 

In contrast, the opposition party Union por la Patria, controls a significant caucus of 33 senators, needing only four additional votes to secure a majority, reports the Buenos Aires Times.

“Argentines who live from their work, those who dedicate their efforts to study and progress, those who long for a promising future for their descendants and the generations to come, expect that the greatness seen today in the House of Deputies will soon be reproduced in the Senate of the Nation,” the president’s office said in a statement, hopeful that the bill will finally pass.  

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