BUENOS AIRES (CN) - After days of political and economic turmoil that shook the foundations of the Javier Milei administration in Argentina, Wednesday marked yet another challenging day for his government. While the House of Representatives rejected presidential vetoes on measures increasing funding for public universities and children's hospitals, thousands rallied across the country to protest the libertarian austerity policies.

Lawmakers from across the political spectrum moved to reinstate health and education measures Milei had struck down earlier this month. The legislation, which will likely be approved in an upcoming Senate session, aims to restore a bill declaring a national health emergency in pediatric care and residency programs, citing urgent hospital needs, and revives a separate measure boosting funding for public universities and raising professors' salaries - long a flashpoint amid inflation.

Since taking office, Milei has pledged to veto every law that does not demonstrate how it would be self-funding and therefore preserve fiscal balance. But some of his political allies, including many in PRO, a right-wing party that endorsed his candidacy in the 2023 runoffs, appear to have found a limit in his approach after his vetoes overturned policies - including improving aid for people with disabilities, ill children and public university students.

Evelin Cano, a law student and public university organizer, said rejection of the veto "is key to challenging Milei's austerity program."

Congressman Carlos D'Alessandro, a former La Libertad Avanza lawmaker who has now joined a dissident bloc, deemed the veto "immoral."

It came at a vulnerable moment for the Milei administration, which suffered a significant local midterm defeat on Sept. 7 and faces a challenging national midterm election on Oct. 26. Earlier this month, the House also rejected a veto of a bill increasing aid for people with disabilities - a first in more than 20 years.

Although Milei did not enter office with strong support in Congress and many questioned his legislative firepower, his government managed to build alliances that allowed him to pass sweeping legislation early in his term, including extraordinary legislative powers enabling broad changes in the public sector. That firepower now seems to be eroding as his administration approaches the second anniversary of his mandate.

Recent corruption scandals involving his sister and closest aide, Karina Milei, have also put a spotlight on claims of lack of transparency within the government, raising doubts about their promise to challenge Argentina's political caste.

Milei promised not only to fix the economy but also to transform it radically, with fiscal balance at the core of his economic and political strategy - intended to create conditions for more investment and reliance upon Argentina.

Yet the impact of his decisions has met the desperation of many who feel unfairly targeted by these cuts. While a nurse in a children's hospital and a tenured university professor earn less than $1,000, scientific researchers make about $600, and a pensioner with the minimum pension receives less than $500 per month. To stand above the poverty line, an adult must earn at least $350 per month - a sum that does not cover rent, utilities or other essential expenses.

"No one should pay for your dreams," said Lilia Lemoine, a lawmaker for the Libertarian Party and one of Milei's aides in Congress, in an interview when hospital workers began protesting earlier this year. "They can always quit and do something that's more profitable."

"This is the trap created by the Kirchnerist psychopaths: they invent rackets around sensitive places, and when you dismantle them, they call you insensitive," said Milei on a radio show when the conflict with hospital workers began, describing the claims as political operations amplified by his main opponents.

"The government has been challenged on the streets and in the ballot boxes," said Alejandro Lipcovich, an employee at the Garrahan children's hospital and unionist. "We, as workers, are in a better position to demand specific policies."

Over the past few months, groups most affected by the austerity measures - including those dependent on public education, health services and aid for the disabled, as well as self-organized pensioners demanding income improvements - have led the biggest challenges for Milei.

And the president seemed to be listening. As he presented his 2026 budget bill on public broadcast, he announced he would increase the national university budget by roughly $3.3 billion and expand spending on pensions by 5% and on health by 17%. He also promised that, if approved, public education spending next year would rise by 8%.

However, these increases fall short of what university authorities say is needed to offset past years' funding freezes and to keep up with inflation that has systematically eroded salary purchasing power.

According to a recent report by the University of Buenos Aires, the future of public universities in Argentina is "complex and unpredictable." While UBA stands among the best-ranked universities in Latin America, spending per student in 2014 was $1,485, while the Autonomous University of Mexico (UNAM) spent $8,180 per student, and the University of San Pablo (UP) spent $17,942.

Historically, public university salaries in Argentina matched inflation to some extent, the report said. However, since December 2023, when the new administration took office, the purchasing power of university salaries has decreased by 40%.

Guido Zack, head of economy at the think tank Fundar, said the budget presented by Milei "is already outdated," pointing to assumptions that the exchange rate would remain below current levels until late 2027 - a week in which the U.S. dollar rate increased significantly and the Central Bank intervened to support the peso.

Market projections, Zack argued, make it "almost certain" that inflation will exceed official estimates, with knock-on effects on growth.

The result, he said, is that revenues are understated while real spending is overstated. "The increases in health and education spending are far from compensating for the adjustments of the last two years," Zack noted.

"Without an additional source of dollars, growth cannot resume," he said, noting that exports cannot cover the imports needed for recovery, while both investment and capital inflows are absent. Instead, he argued, the peso remains too strong to attract foreign currency, weakening reserves and deterring investors.

Continuing to pursue growth under the current framework, he warned, amounts to "bread for today and hunger for tomorrow."

Courthouse News reporter Lucia Cholakian Herrera is based in Buenos Aires, Argentina.

Source: Courthouse News Service