Milei’s radical reform advances in the Argentine Senate amid clashes between protesters and police

BUENOS AIRES, Argentina — Early Thursday morning, Argentina’s Senate began a likely all-night marathon of voting on the details of President Javier Milei’s sweeping proposals to drastically cut government spending and increase his own powers. Moments earlier, the Senate approved the plan as a whole in a narrow vote amid clashes between thousands of protesters and police outside.

Senators voted 37-36 late Wednesday night to give preliminary approval to the two bills. This followed a heated debate that lasted all day, with thousands of protesters pouring into the streets, setting cars on fire and throwing Molotov cocktails, while hundreds of federal security forces repelled the demonstrators with tear gas and water cannon.

The vote, which was decided by a tie vote led by Vice President Victoria Villarruel, was a major boost for Milei, whose efforts to overhaul the government and economy have faced fierce opposition in Argentina’s opposition-dominated Congress.

“Tonight is a triumph for the Argentine people and the first step towards restoring our greatness,” Milei posted on X, calling his bills “the most ambitious legal reform of the last 40 years.”

However, key elements of the sweeping bill still need to survive an article-by-article vote in the Senate. After that, the bill will go back to the lower house, where MPs must approve any changes before Milei can officially declare his first victory in Parliament.

Right-wing and left-wing lawmakers are clashing over various parts of the 238-article state reform law, which includes declaring a one-year state of emergency and giving the president sweeping powers in energy, pensions, security and other matters until the end of Milei’s term in office in 2027.

Other controversial measures include an incentive scheme that would provide investors with lucrative tax breaks for 30 years.

Milei is a political outsider with only two years of experience as a member of parliament, and his three-year-old Liberty Advances party has only 15 percent of the seats in the lower house and 10 percent of the seats in the Senate.

In his six months as president, he failed to pass a single law, raising questions about whether he can deliver on his ambitious plans to reduce the budget deficit and boost growth. Instead, he used his executive powers to cut subsidies, fire thousands of civil servants, devalue the currency and deregulate parts of the Argentine economy.

The spending cuts and currency devaluation imposed by Milei have – at least in the short term – deepened the recession, increased poverty to 55 percent and pushed annual inflation to nearly 300 percent.

“If this law is passed, we will lose many of our employment and pension rights,” said 54-year-old teacher Miriam Rajovitcher, who protested before the vote alongside her colleagues who say they have had to reorganize their lives since Milei cut school budgets and devalued the currency. “I am so much worse off.”

Analysts say the promised benefits of Milei’s reforms – a stable currency, tamed inflation, fresh foreign investment – will not materialize unless there is a political consensus to convince foreign investors that his reforms are permanent. Milei’s government has announced plans to sign a new agreement with the International Monetary Fund, to which Argentina already owes $44 billion.

“Everyone is waiting,” said Marcelo J. García, Americas director of Horizon Engage, a geopolitical risk firm. “Investors are saying, ‘Yes, we like what you’re saying, but we need to see that it’s sustainable.'”

Milei’s allies said Wednesday they had made tough concessions. His Liberty Advances party agreed not to sell the post office, the airline Aerolíneas Argentinas or the public broadcaster, leaving only a handful of state-owned companies, including Argentina’s nuclear energy company, in the running for possible privatization.

Milei’s initial proposal late last year to privatize more than 40 Argentine state-owned companies sparked an outcry from the country’s powerful Peronist-dominated labor movement.

These voices were heard in downtown Buenos Aires on Wednesday before the Senate vote, as bankers, teachers, truck drivers and thousands of union members and activists gathered around Congress, chanting: “Our country is not for sale!”