For both the government and the opposition, the central issue revolves around the extent of spending on pensions, with scant attention given to the potential for achieving greater outcomes with reduced resources. The presidential vetoes enacted last weekend concerning legislation for pensioners and the handicapped, coupled with the midweek passage of the university funding bill by a defiant Congress, indicate that the executive and legislative branches are on a collision course for the remainder of this month.
The absence of deputies on the campaign trail may or may not affect the number of sessions following the official commencement of the midterm election campaign on August 27. The confrontation aligns seamlessly with the polarization pursued by the two primary contenders in the midterm contest – a polarization that, by its very nature, simplifies intricate issues into binary propositions. Advancing any third way alternatives proves challenging when such a path in politics is devoid of strength, cohesion, and, crucially, self-worth. As articulated by William Butler Yeats in his poem “The Second Coming” over a century ago: “The best lack all conviction while the worst are full of passionate intensity.”
The current confrontation encompasses various issues, including pensions, the handicapped, and universities. However, the strategies employed by both the libertarian administration and the opposition exhibit a remarkable degree of simplification. The administration opts for broad cuts under the guise of achieving a fiscal surplus, while the opposition resorts to indiscriminate financial injections to address the problems at hand. However, in addressing these matters, it should not be a matter of accepting these structures as they currently exist and subsequently determining the appropriateness of their funding levels.
The initial phase invariably involves acknowledging the intricacies of the issue, with diagnosis taking precedence over the solution. The discourse surrounding pensions focuses on the erosion of approximately 25% of purchasing power under the present administration, which serves as a significant impetus for the recent midweek demonstrations outside Congress. Meanwhile, libertarians seem to eschew any direct defense, opting instead to advocate for the purported advantages of reduced public expenditure in controlling inflation. However, a detailed examination of the situation reveals that, although the damage occurred during Javier Milei’s presidency, it primarily stemmed from the ongoing updating mechanism established by Alberto Fernández, who seemingly disregarded inflation in the first quarter of 2024, which saw double-digit inflation each month. This could be interpreted as a deliberate and cynical continuation of previous policies. In contrast, Milei’s own index-linking mechanism is significantly more effective, thereby complicating the attribution of blame between the current and former presidents. The situation is further complicated by the disparity between minimum retirement benefits and other forms of compensation. While the decline in the former was limited to two percent through bonuses under Alberto Fernández, the remainder experienced a 25 percent reduction in purchasing power. In contrast, Milei has taken a different approach by implementing a freeze on the bonus.
For both the government and the opposition, the focus tends to revolve around the issue of increased spending on pensions, with scant attention given to the potential for achieving more with reduced resources. In essence, rather than merely adjusting the existing pension system through incremental increases or reductions, it is crucial to focus on the numerous specialized schemes that allow certain individuals to retire as early as 50. While the preferential pensions afforded to politicians occasionally attract public scrutiny, they represent only a fraction of a much larger issue. The current retirement age of 65, let alone 50, appears increasingly outdated in light of an ageing population and the enhanced vitality of senior citizens. Raising the retirement age could yield substantial savings for the pension system, yet it may also exacerbate the pressing issue of youth unemployment. In summary, the resolution need not be uniform; rather, it can entail an increase for certain individuals and a decrease for others.
The two additional bills that President Milei vetoed last weekend – the pension moratorium and the state of emergency for the handicapped – present their own complexities. One might readily adopt the role of the elder brother in the parable of the prodigal son, expressing outrage at the allocation of even a minimal pension to individuals who have not contributed to social security. However, it is essential to recognize that many of these individuals are housewives dedicated to raising families without any formal compensation. On the other side of the fence, it is also easy enough to express indignation over government insensitivity towards the handicapped. However, additional funding for them could potentially be sourced from the existing budget. Reports indicate that there is abuse in some provinces, where these benefits are being utilized as handouts, with a notably high 21 percent of the population registered with some form of handicap in Santiago del Estero.
A vote in Congress typically results in an affirmative or negative response, with abstention as the sole alternative. However, it is essential to recognize that no issue should be simplified to a binary choice without first considering the nuances and potential compromises that lie in the middle ground.