Argentina's Milei to veto pension reform, widening rift with Congress

BUENOS AIRES (Reuters) -Argentine President Javier Milei will veto a pension reform passed on Thursday by the Senate in a move that is likely to widen an ongoing rift between the libertarian leader and the opposition-controlled Congress.

The Senate had overwhelmingly agreed to hike pensions in line with the country's triple-digit inflation, which could have risked the strict fiscal balance pushed by Milei.

Milei's office said in a statement on X that the bill's "only objective was to destroy the government's economic program," as it would have required spending an extra 1.2% of the gross domestic product.

"The president promised Argentines that he would maintain a fiscal surplus at all costs, and he will," his office said.

Milei took office in December with strict austerity measures as part of a bid to tackle rampant inflation in the face of rising poverty now hitting half of the Argentine population.

Peronist center-left Senator Juliana Di Tullio, who had voted for the pension adjustment, said that "55.5% of Argentines are in poverty and 17.5% are in extreme poverty. Many of them are senior citizens."

Last week, Congress struck down a presidential decree which would have multiplied the intelligence budget, arguing those funds could be used for more urgent social needs.

(Reporting by Nicolas Misculin; Writing by Kylie Madry; Editing by Stephen Coates and Michael Perry)