Argentina’s Milei Bruised as Congress Overturns More of His Vetoes

Argentina’s austerity crusader Javier Milei just got another political slap in the face. Congress has now overturned his vetoes on two major bills, one boosting funding for public universities, the other for paediatric care.

The Senate vote on Thursday upheld both laws, which had already been backed by the Chamber of Deputies, making this the third time legislators have rejected Milei’s attempts to block spending.

Milei has warned the extra cash will blow a hole in Argentina’s fragile fiscal balance. But lawmakers clearly weren’t buying it. The loss comes as the president, elected on promises of radical budget cuts, is already battling a currency run and sagging public confidence ahead of the October 26 midterm elections.

The mood has shifted fast. Last month, Milei’s party was crushed in Buenos Aires province by the centre-left, a result that rattled markets and stripped away the aura of invincibility he had built since taking office in December 2023.

Washington has been trying to help steady the ship. The US announced talks with Buenos Aires on a $20 billion swap line to shore up the peso. President Donald Trump even stepped in to cheer his ally on, declaring in New York:

“He’s doing a fantastic job.”

The two leaders are expected to meet again in October.

Still, analysts warn Milei badly needs a solid showing in the midterms to keep markets and politics on his side. The peso, after a short rally, slumped again this week as investors questioned how far, and how fast, US financial support would really go.