Argentine lawmakers debate bill to hike pensions

* Bill debated in Senate already passed in lower house

* Hike would be funded by pensions agency, tax revenue

* Government likely to veto measure if passed

BUENOS AIRES, Oct 13 (BestGrowthStock) – Argentina’s Senate on
Wednesday began debating a bill to boost pension benefits, an
opposition-led proposal that the government will likely veto
after arguing it would bankrupt the system.

Argentina’s lower house passed the bill in August, putting
center-left President Cristina Fernandez in the uncomfortable
position of opposing a popular measure ahead of an October 2011
presidential election. [ID:nN19255736]

The bill would raise basic pensions to 82 percent of the
minimum wage, which government officials said would cost
roughly $10 billion a year.

“That would cost the state an additional 40.088 billion
pesos in 2011 alone,” the head of the ANSES state pensions
agency, Diego Bossio, said via Twitter.

The bill, which would benefit some 5 million retirees,
would raise minimum pension benefits to 1,427 pesos ($357) from
1,046.50 pesos currently.

Funding for the increase would come from tax revenues
exceeding the level set forth in the budget and from the ANSES
agency’s surplus, according to the bill.

Economy Minister Amado Boudou has warned that if the
opposition pension plan were enacted, Argentina would face a
period of “spiraling debt and a permanent fiscal deficit.”

Private economists generally agree with the government that
the move would endanger fiscal accounts, noting that about 40
percent of primary spending — which excludes debt repayments
— already goes to paying pensions.

Double-digit inflation in recent years has stoked demands
for wage and pension hikes. [ID:nN13269275]

Fernandez and her husband and predecessor, former President
Nestor Kirchner, nationalized private pensions and extended and
increased benefits as a cornerstone of their social policies.

The opposition-led pensions drive has put the presidential
couple on the defensive and could force a veto from Fernandez,
which would be politically risky in the run-up to next year’s
vote, in which Kirchner is seen as a likely candidate.

In a bid to seize back the political initiative, Fernandez
unveiled a pensions hike in July as if it were new even though
the increase was mandated by law. [ID:nN28180590]
($1 = 4.00150 Argentine pesos)
(Reporting by Juliana Castilla, Writing by Luis Andres Henao;
Editing by Andrew Hay)

Argentine lawmakers debate bill to hike pensions