A severe setback for the government: the House of Representatives approved the pension increase and threatened to reject Milei's possible veto.

Without the support of the governors, the government suffered a crushing defeat in the House of Representatives on Wednesday, where the opposition gave preliminary approval and forwarded to the Senate a bill that increases pensions by 7.2%, updates the emergency bonus, and transforms into law the formula for updating salaries that President Javier Milei issued through a decree.

The proposal was approved with 142 votes in favor thanks to the support of Union for the Homeland, Federal Encounter, Democracy Forever, the Civic Coalition, the left, and partial support from the UCR and provincial blocs. The ruling party, with the PRO and some allies, garnered 67 votes against , while there were 19 abstentions .

The fact is that the PRO (Progressive Party) voted divided because the sector closest to the government rejected the increase, while the Macri supporters, like the majority of the Radicals who belong to Rodrigo de Loredo's bloc, abstained.

Furthermore, while the initiative didn't reach two-thirds of the affirmative votes (it fell short of 10 votes according to how the vote ended), the rejection rate also fell short of one-third, which could be a red flag for the Casa Rosada, which needs the support of 87 deputies to sustain a possible veto by Javier Milei. Consequently, the ruling party will have to seek support from the 19 legislators who abstained on Wednesday.

The surprise of the day was that Kirchnerism managed to approve the reinstatement of the pension moratorium for two years . The initiative received preliminary approval with 111 votes in favor, 100 against, and 15 abstentions.

After the proposal's approval, Milei took to social media to question the representatives and sent a message to the senators telling them "not to support this populist demagoguery." "In any case, our commitment is to veto anything that threatens the deficit," the President warned on social media.

The bottom line is that the Lower House approved a 7.2% increase for all pensions to compensate for the loss in pensions suffered at the beginning of 2024 due to inflation.

In addition, the deputies moved forward with an update to the bonus received by minimum-income retirees, increasing it from $70,000 to $110,000 . This amount will also increase based on inflation.

The government anticipated vetoing the retirement and Disability Emergency projects because it maintains they generate a fiscal impact of US$12 billion, representing 1.8% of GDP.

The law, which was approved by the House of Representatives, also requires ANSeS to send, before the 20th of each month, to those provinces that have not transferred their pension plans to the national government, an advance payment equivalent to one-twelfth of the total amount of the last annual deficit.

However, Nicolás Massot, of Encuentro Federal, proposed seven concrete sources of financing that would cover the cost without breaking the surplus . In this regard, he proposed the reinstatement of VAT for company directors, the removal of more than $32 billion from the SIDE (National Secretariat of Economic Development), and a reduction in public debt service expenses, based on the agreement with the International Monetary Fund (IMF), among other measures.

The opposition won despite pressure from Santiago Caputo, the government's star advisor; Eduardo "Lule" Menem, Karina Milei's operative; and Martín Menem himself, who called the governors asking for help to bring down this Wednesday's session. The threat to veto whatever Congress passes also made no difference.

Just as happened two weeks ago, La Libertad Avanza, the PRO party, and the bulk of the UCR party failed to provide a quorum, although this time more Radicals broke away from the position of the bloc led by Rodrigo De Loredo: Fabio Quetglas, Julio Cobos, Natalia Sarapura, and Mario Barletta sat down and were decisive. In the last session, only Cobos had withdrawn.

In turn, it was crucial that Unión por la Patria reduced its attendance from eight to four at the previous session: Celia Campitelli and José Gómez, from Santiago del Estero, who answer to Governor Gerardo Zamora; Aldo Leiva, from Chaco; and Fernanda Avila, from Catamarca, who answer to Governor Martín Llaryora, who were absent the previous session, were also absent. Two of the three Cordoba residents who answered to Governor Martín Llaryora, who were absent the previous session, also provided a quorum.

The debate opened with a speech by Victoria Tolosa Paz, who defended the pension update plan. "This 7.2% increase is a reminder of how the adjustment began under Javier Milei's administration," she said. "This increase seeks to restore the first major adjustment that took place when the Argentine peso was arbitrarily devalued by 118%."

For his part, Nicolás Massot rejected the proposal as an attempt to complicate the government's goal of maintaining fiscal balance. He also proposed a proportional pension based on years of contributions. This proposal is consistent with the proposal promoted by the Macri administration through Daiana Fernández Molero.

Specifically, the PRO deputy warned that in Argentina "spending is poor, because it's estimated we could spend 30% less and have higher pensions, but the system is riddled with special regimes." She attacked Cristina Kirchner, calling her "a mamushka of privileges" because "she has the southern zone, the double privilege of her presidential pension, and Néstor's retirement."

Meanwhile, the ruling party's Carlos Zapata also took aim at Kirchnerism . "They dedicated themselves to trying to solve problems with patches, a tire shop-style government, and they didn't lack for money either," the Salta native said, accusing the Kirchners of trying to upset the fiscal balance.

Meanwhile, Gisela Marziotta (Union for the Homeland) attacked the ruling party, accusing it of "disdain for the people and the expansion of rights." "They hate retirees, they hate students at national universities, they hate doctors at public hospitals. Javier Milei's true political platform is this: hate as politics," she concluded.

The session continued with a discussion of projects that declare a state of emergency in Bahía Blanca and other districts affected by flooding, such as the healthcare system for people with disabilities.