Congress took the lid off of Argentina's pressure-cooker politics by rejecting the taxes that spurred four months of social and economic conflict. The president's decision later to revoke the taxes, which had been only symbolically rejected by Congress, helped to further decompress the situation.
The seismic shifts in Argentine politics this past week merit a weekend roundup summarizing what happened and where things now stand.
On Thursday, after four months of growing tension between farmers and the executive branch, Congress rejected a controversial plan by President Cristina Fernandez de Kirchner to place a sliding tax on farm exports. The tax, which Fernandez had imposed through an executive resolution, set off unprecedented protests including roadblocks and a ban on food exports.
The protests, and Fernandez's reaction to them, damaged the president's approval ratings. By late June just 20% of Argentines thought she was doing a good job, compared with 56% in December. Polls showed that most people wanted farmers and the president to settle their differences through negotiation. But the president, along with her husband and predecessor, Nestor Kirchner, balked at the idea of compromise.
The First Couple rejected virtually every effort to engage farmers in dialogue. Instead, they adhered to a confrontational approach and even accused farmers and their supporters of being “coup-mongers” whose goal was not to lower taxes but to overthrow the government.
To prevent farmers from gaining political ground, the president portrayed them as oligarchs who opposed her plans to reduce poverty, redistribute wealth, and make Argentina a more just society. But polls showed that average Argentines did not believe her approach to the conflict was helpful, and almost every time she and the farmers clashed, polls indicated that her approval rating took a beating.
All of this led the president last month to send her tax package to Congress for approval. Legally, this was unnecessary, at least according to some constitutional analysts. Fernandez was able to impose the taxes through an executive resolution because Congress had made itself largely irrelevant by declaring (as it has every year since the 2002 crisis) that Argentina is in the midst of an economic emergency.
Because of this “emergencia económica,” Congress each year has allowed the executive branch to bypass it and impose economic policy via executive decrees and resolutions. Were it not for the so-called emergency legislation, it would be Congress, and not the executive branch, that determined tax policies. Argentina's Congress, after all, is just like the U.S. Congress in that the constitution gives it the “power of the purse.” One of the farmers' complaints was that the executive branch has been usurping Congressional powers for too long. According to polls, many people agreed, putting more pressure on legislators to oppose the president.
Fernandez gambled big when she sent the taxes to Congress. Doing so, she figured, would give the controversial measures a degree of legitimacy that they previously lacked. At the very least, she figured, Congressional approval would deprive farmers of their argument that the president imposed the taxes arbitrarily and capriciously.
Fernandez figured her move was a wise gamble, if even a gamble at all. She had previously exerted great influence over Congress, where both she and Nestor before her had the support of a majority of legislators in both Houses. But the gamble was a bad bet. Pervasive opposition to the taxes in particular, and to her and her husband's combative and confrontational style in general, curtailed the president's influence. Legislators typically loyal to the Kirchners faced fierce opposition in their districts and, in some cases, on the doorsteps of their homes.
The Lower House approved the taxes by just seven votes. But the Senate, where the president was expected to have even more support, proved even more problematic. After 18 hours of debate, the Senate remained gridlocked with 36 votes in favor and 36 against. That left the tie-breaking vote to Fernandez's own vice president, Julio Cobos. To the president's regret, Cobos broke rank and voted against the taxes, delivering a stunning legislative and political defeat to a president unaccustomed to opposition or setback.
This unexpected event stunned the nation, surprising many of the most experienced analysts. But it was not Cobos's vote per se that shocked analysts. The keenest observers would say that he had telegraphed his intentions weeks before. What was most surprising was that a president who had once held sway over two thirds of the Senate, was left on her own by many members of her own Peronist political apparatus .
The Senate vote left people wondering what would come next. Expectations grew Thursday as the Casa Rosada announced that the president would address the nation on national television at 7pm. Reporters like myself focused our attention on the TV. We were expectant, curious and eager to find out what the president would say. Average citizens likely felt the the same.
But in a surreal display, an unusually serene and smiling president took to the stage and made not a single direct reference to the conflict or the Senate's historical decision. The entire nation was waiting to hear her take on the biggest political event in Argentina in years.
“This is a very sad day,” she said.
She could have been referring to her defeat in the Senate. But the president then spoke obscurely instead about the death of a close friend. She said that “ugly and terrible things” can happen to politicians just as they happen to average people. The difference, she said, is that people in power cannot always express their reaction to such ugly things openly.
The president's peculiar speech left people wondering. What did she mean to say? What did she think about the Senate decision? How would her administration react to it? Why didn't she say anything about it? Why did a president whose public facial expressions often convey anger seem so unusually serene under circumstances that would normally be stressful for any leader?
“The government's overwhelming silence over the parliamentary defeat was grave,” wrote La Nación columnist Joaquin Morales Sola. “But it was even more grave to hear a president who seemed to be living in another country, in another world.”
A hint of the administration's reaction came on Friday, when Cabinet Chief Alberto Fernandez said the government would revoke Resolution 125, which imposed the taxes. Farmers celebrated the move. Argentine Rural Society President Luciano Miguens even said it meant “the conflict is over.” It also meant, perhaps, that the government intends to cede at least some ground and take a less confrontational approach to political debate. After all, there was no legal obligation for the president to revoke the resolution, only a political impetus to do so. Society, it seems, spoke on Thursday when Cobos cast his vote. It was a vote against the farm taxes and in favor, Cobos said, of a new style of government.
It is hard to predict the long-term consequences of Cobos's vote. But in a country that tends to condemn and discard its politicians with incomparable consistency, Cobos was able to do two things that few influential politicians here achieve. First, he set off a political earthquake by defying the executive branch in its moment of greatest need.
Second, since 2002 nobody has done this without suffering intense public scrutiny from the executive branch and its supporters. Not only are the Kirchner's not in a position to criticize him publicly, but Cobos was able to drive to his hometown without being yelled at or scorned by his fellow countrymen. He rocked Argentina's political landscape and remained unscathed. This is a rare occurrence in Argentina. When he went home to Mendoza this week, Cobos was applauded by his compatriots, not jeered. He was shown respect for challenging the executive branch. And this is a lesson that is not likely to fall on deaf ears for others who wish to challenge the administration and its policies.
And yet in a second speech Thursday, the president gave some indication that she is not willing to back down from the position she held before Thursday's Senate defeat. She accused her opponents of being “slow learners” who still need to properly digest the true meaning of her October election victory. “Some take longer than others to learn” their lessons, she said.
The president's decision to revoke the taxes has momentarily taken pressure off those who feared she would become even more combative after this week's events. But it also has made it more likely that opponents will increase the pressure on her to cede ground on other policies. In the past, neither of the Kirchners has taken kindly to opposition or pressure of any kind. The president will have to deal with new challenges from outside her inner circle, as well as discontent and internecine feuding within her own cabinet and party. Only time will tell what this means for the future of Argentine politics.
*As usual, rumors circulated that Cabinet Chief Alberto Fernando and Commerce Secretary Guillermo Moreno would resign in the days ahead.