Argentina’s Government managed in the early hours of this Thursday to give half sanction of Deputies to the Budget 2026, which would be the first Budget of the Milei Government, since during the last two years it resorted to extensions of the plan of expenses and revenues of 2023.
President Javier Milei’s administration secured parliamentary approval for its first 2026 national budget on Wednesday, a contentious adjustment package passed after years of governing by discretionary decree.
The budget, which critics argue deepens cuts to social programs and relies on economically dubious forecasts, passed the Chamber of Deputies with 132 votes in favor, 97 against, and 19 abstentions, but needs the approval of the National Senate.
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Este es un presupuesto de ajuste que deja afuera a la mayoria de la población y beneficia solo a unos pocos empresarios y al Fondo Montenario Internacional.
Se desprograman obras de infraestructura estratégicas como la del Canal Magdalena, que facilita nuestro transporte,… pic.twitter.com/VNXuFZQFHx
— Jorge Taiana (@JorgeTaiana) December 18, 2025
Text reads: “This is an adjustment budget that leaves out the majority of the population and benefits only a few entrepreneurs and the International Monetary Fund…”
The 2026 Budget
The budget incorporates significant structural modifications. These include:
- The elimination of the automatic indexation for family allowances and the Universal Child Allowance, effectively freezing these benefits despite ongoing inflation.
- The removal, via Article 30, of key national development pillars:
- Abandoning the legal target of spending 6% of GDP on education. Scrapping the progressive investment goal to reach 1% of GDP for science and technology.Defunding the National Fund for Technical Schools.
- Dismantling FONDEF, which guaranteed a minimum investment of 0.8% of current revenues for defense.
“You don’t have to camouflage yourselves anymore to harm people with disabilities, the university community, and technical schools,” deputy German Martinez commented.
A Victory Forged by Political Bargain
The government’s victory was engineered by a relentless lobbying effort from Interior Minister Guillermo Menem and Deputy Diego Santilli, who negotiated with governors until the final hours. The far-right administration distributed over 66.5 billion argentinean pesos (approximately $66.5 million) in National Treasury Contributions (ATNs).
The government also pledged to the city of Buenos Aires that it will transfer the co-participation funds established in the agreement before the Supreme Court.
Likewise, a reform of the Glacier Protection Law was submitted to Congress. This initiative enables provinces to advance mining projects on strategic water reserves. If approved, Catamarca, Mendoza, and San Juan would be among the primary beneficiaries for conducting business with U.S. multinational corporations.
The Center for Argentine Political Economy (CEPA, in Spanish) stated its macroeconomic projections are “severely out of sync” with reality, citing projected 5% growth and 10.1% annual inflation as unrealistic.
Furthermore, it does not allocate funds to restore retirees’ decimated purchasing power, reactivate paralyzed public works, or stimulate economic activity. “The libertarian budget that achieved half-sanction… consolidates an austerity framework,” the CEPA’s analysis concluded.
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