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Founded in 1876 Saturday, October 13, 2007 Edition Nº 1786
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Home   >  Editorial   >  Don’t budge it

ENGLISH VERSION

Don’t budge it

 
HERALD STAFF


Economy Minister Miguel Peirano duly complied with the executive branch’s constitutional obligation to present the 2008 budget to Congress on Wednesday but he did not permit any questions, a detail which is far from minor — Congress is not supposed to be merely the passive recipient of the budget but to debate it actively prior to its approval, rejection or amendment, a task historically central to the parliamentary role. But the budget has long been a dead letter, especially with the notorious “superpowers” (allowing the Cabinet Chief to reallocate budgetary items at will) being made permanent in the past year. Congress has already delegated far more than it should, including the right to impose taxes without parliamentary approval (for example, the utility rate surcharges), thus violating the principle of “No taxation without representation.” And in the face of this crass invasion of the second branch of power by the first, what is the third branch (the Supreme Court) doing to protect the separation of powers?
Quite apart from these fundamental principles, the 2008 budget is also flawed in detail, such as an absurdly low annual inflation forecast of 7.7 percent. In contrast to all the previous budgets of the Néstor Kirchner administration, which have tended to understate the fiscal surplus by deliberately underestimating the revenue forecasts (and thus creating discretionary funds running into billions of pesos), this budget carries the seeds of deficit. And the main reason for this is that while this budget formally runs until September 15, 2008, its real horizon is October 28 of this year — the most striking feature of the budget presented on Wednesday is the automatic index-linking of pensions as from the start of next year, a blatant piece of electioneering. The fixed expenditures in the 2008 budget already eat up two-thirds of the revenues without even beginning to finance the various intangibles looming: this extra pension spending, the fast-growing sums needed to service the foreign debt (when the government refuses to complete its emergence from default by settling with the Paris Club or bond swap holdouts) and rising provincial deficits. All this would be asking a great deal even of the fiscal surplus of 2.8 percent of the Gross Domestic Product stipulated in the 2008 budget. Within this context the government can forget about the discretionary funds hitherto enjoyed via the trick of undershooting revenue forecasts — Peirano will need all such money to mop up the potential red ink.
What a pity that a budget supposedly designed to chart the first of the next four years cannot look beyond the next five weeks.


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