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### Viewing cable 06BUENOSAIRES1732, K VERGUENZA: KIRCHNER-CONTROLLED CONGRESS PASSES

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06BUENOSAIRES1732 | 2006-08-03 18:53 | 2011-03-13 07:00 | CONFIDENTIAL | Embassy Buenos Aires
Appears in these articles: http://www.lanacion.com.ar/1357063-eeuu-veia-una-oposicion-cercana-a-la-irrelevancia

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    VZCZCXRO9877
    PP RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHQU RUEHTM RUEHVC
    DE RUEHBU #1732/01 2151853
    ZNY CCCCC ZZH
    P 031853Z AUG 06
    FM AMEMBASSY BUENOS AIRES
    TO RUEHC/SECSTATE WASHDC PRIORITY 5441
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    RUCNMRC/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
    RUEHMD/AMEMBASSY MADRID 1681

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    C O N F I D E N T I A L SECTION 01 OF 02 BUENOS AIRES 001732

    SIPDIS

    SIPDIS

    STATE FOR WHA TOM SHANNON, JOHN MAISTO, AND CHARLES SHAPIRO
    NSC FOR DAN FISK
    TREASURY FOR DAS NANCY LEE
    USCINCSO FOR POLAD

    E.O. 12958: DECL: 08/03/2016
    TAGS: PGOV PHUM PREL AR
    SUBJECT: K VERGUENZA: KIRCHNER-CONTROLLED CONGRESS PASSES
    SUPERPODERES BILL

    REF: A. BUENOS AIRES 01594

         ¶B. BUENOS AIRES 00293

    Classified By: CDA, a.i., Michael Matera, Reasons 1.4(b) and (d)

    ¶1.  (SBU) SUMMARY: On August 2, the Lower House of the
    Argentine Congress approved a controversial bill granting the
    Casa Rosada permanent special powers to modify the federal
    budget without the approval of Congress.  The bill passed the
    Senate three weeks earlier.  Congress authorized these
    special budgetary powers on a year-by-year basis during the
    economic crisis and its aftermath between 2001 and 2005, but
    the new bill would make these powers permanent.  Political
    opposition leaders strongly opposed the bill, but with the
    help of the ex-Duhaldista bloc and defecting Radical Civic
    Union (UCR) members, Kirchner's supporters easily won the
    vote.  END SUMMARY.

    ¶2. (SBU) On August 2, the Lower House of the Argentine
    Congress approved a controversial bill granting the Casa
    Rosada permanent special powers to modify the federal budget
    without the approval of Congress.  The bill passed the Senate
    three weeks earlier.  The new law specifically will permit
    Cabinet Chief Alberto Fernandez to move funds around within
    five key areas of the budget: government administration,
    security and defense (with the exception of the national
    intelligence service SIDE), social services, economic
    services, and public debt interest.  Furthermore, the Cabinet
    Chief will be able to alter the percentage of the budget
    devoted to current expenditures and capital investments.

    ¶3.  (SBU) Congress authorized these special budgetary powers
    on a year-by-year basis during the economic crisis and its
    aftermath between 2001 and 2005, but the new bill would make
    these powers permanent.  The Casa Rosada did not request the
    special budgetary powers in the 2006 budget, approved before
    Kirchner effectively won control of Congress in the October
    2005 legislative elections, because of opposition in
    Congress.  (See Reftel A for more on Kirchner's recent
    actions in Congress.)

    ¶4.  (SBU) Leaders from the political opposition strongly
    opposed the bill, but with the help of the ex-Duhaldista bloc
    and defecting UCR members, Kirchner's supporters easily won
    the vote.  President Kirchner argued that the special powers
    are ""necessary instruments to be able to govern and carry
    Argentina forward.""  Kirchner's allies in Congress criticized
    UCR congressmen opposed to the current bill that voted in
    2001 to grant then Minister of the Economy Domingo Cavallo,
    part of a UCR-led government, these same powers.  (Note:
    Cristina Kirchner, then a Lower House Member from Santa Cruz,
    vehemently opposed the granting of special budgetary powers
    to Minister Cavallo in 2001.  End Note.)  UCR President
    Roberto Iglesias countered, ""It would be irrational to think
    that rules in force during a moment of hyperinflation would
    be applied today, when there is a surplus.""  Affirmation for
    an Egalitarian Republic (ARI) expressed her opposition in
    stronger terms, arguing that the bill represented, ""the death
    of the Republic.""  ARI and Mauricio Macri's Republican
    Proposal (PRO) are considering taking legal action against
    the bill, but legal consultants argue that the chances of a
    successful legal challenge are remote.

    -------
    COMMENT
    -------

    ¶5.  (C) Together with the recently passed law that
    legitimates the President's arbitrary use of presidential
    decrees, Kirchner has essentially stripped the Argentine
    Congress of its control over the budget.  Kirchner's
    additional powers will undoubtedly be useful next year during
    the presidential election campaign.  Kirchner's budgetary
    control and other recent actions, such as the Council of
    Magistrates reform that strengthened the Casa Rosada's
    control over the judiciary (See Reftel B), have brought
    presidential authority in Argentina to its highest level

    BUENOS AIR 00001732  002 OF 002

    since the return of democracy in 1983.  All hope that
    Kirchner would pursue more moderate policies after winning
    the mandate in last year's congressional elections that was
    denied him when former President Carlos Menem dropped out of
    the second round presidential race in 2003 is gone.

    ¶6.  (C) However, Kirchner is not the only one to blame for
    the poor condition of Argentina's institutional democracy, as
    the opposition once again demonstrated its disunity and
    complete lack of power.  Not only did several members of the
    opposition UCR vote for the bill, but unlike during the
    debate over the Council of Magistrates reform, the opposition
    leaders could not even manage to organize a group photo-op.
    Both ARI and PRO leaders talked about taking the issue to the
    courts, but could not agree on a joint legal effort.  The
    opposition will need to work more closely together in order
    to prevent further erosion of Argentina's democratic
    institutions and avoid their relegation to political
    irrelevance.  END COMMENT.

    MATERA

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