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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