Amid the government’s offensive to legally protect the “zero deficit,” Kirchnerism decided to lead the substantive discussion. By deputy Itai HagmanUnión por la Patria presented a project by alternative tax rule The aim is to shift the axis of the debate: to allow the state to spend money when the economy goes into recession, to force it to save in years of growth, and to put limits on both foreign debt and speculative financial flows.
The initiative is a direct response to the ruling party’s proposal – which was not discussed in the last session of parliament – that aims to prevent budget deficits and imposes criminal sanctions of up to six years in prison for officials who authorize spending without budget support. For Hagman, this approach is “rigid” and “procyclical” because it forces adjustments in times of crisis and deprives the state of the tools to absorb economic shocks.
The project It also proposes one of the government’s most frequently cited clauses to block opposition initiatives. Repeals Article 5 of the Financial Administration Act, which requires that any regulation involving expenditure must indicate the source of funding. It’s the argument the executive branch has used time and time again to reject projects related to university funding, disability benefits and other sensitive areas.
The background to the debate is political and conceptual. Repeated to the rhythm of “There is no money.” Javier MileiThe ruling party has managed to embed in public discourse the idea that Argentina’s main problem is spending more than it earns. “Deficit” became a dirty word, and under this guise the president vetoed legislation passed by Congress and froze funds intended for social policy.
Hagman essentially questions this diagnosis. During the committee debate, he claimed that the government was based on a “false assumption”: that fiscal balance automatically solves economic problems. In his opinion, the first two years of management show a different reality: persistent inflation, a stagnant economy and a currency adjustment that he described as “unprecedented.” “The balance sheet balancing has not solved the problems of the Argentine economy,” he explained.
In contrast to the budget rule advocated by the ruling party, the project introduces the concept of a structural primary budget outcome that must be balanced or in surplus.
Put simply, it proposes to evaluate public finances by taking into account exceptional factors such as the volatility of international prices or climatic events in order to prevent fiscal policy from being tied to cyclical fluctuations. On this basis, a determines Band scheme This forces the government to maintain spending in times of recession and moderate it when economic growth is strong, with the aim of creating headroom for difficult years.
The text also focuses on external vulnerability. For Hagman, Argentina’s crises are explained not just by the deficit, but by cycles of accelerated debt and abrupt inflows and outflows of financial capital. The project is in this spirit sets a cap on foreign currency debt not to exceed 30% of GDPand established a Minimum retention period of 180 days for funds from abroad that flow for financial purposeswith the aim of preventing short-term speculation and reducing the risk of runs.
One of the MP’s most difficult questions concerns what, in his opinion, is the selectivity of the official system. As explained in Congress, the government’s fiscal rules guarantee that paying creditors is an absolute priority, while public works, universities and pensions remain unprotected. “The only people guaranteed collection are the creditors. Not everyone else.”he started during the committee debate.
His proposal instead includes a Escape clause This allows the executive branch to deviate from budget targets for up to two years in the event of exceptional situations such as natural disasters or epidemics, always under the control of Congress.
In short, Hagman attempts to introduce a different idea of fiscal responsibility. In his opinion, the “zero deficit” rule promoted by the government is not neutral, but rather consolidates a model that prioritizes financial stability over other economic and social variables.
The project collects 15 signatures, including that of the leader of the “Unión por la Patria” bloc in the House of Representatives, Germán Martínez. He is accompanied by, among others, Cecilia Moreau, Julia Strada, Sabrina Selva and Agustín Rossi.
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