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Argentina Government Answers Voter Setback With Legislative Push

By Matthew Cowley, Of DOW JONES NEWSWIRES

BUENOS AIRES -(Dow Jones)- Argentina's President Cristina Fernandez is pushing a huge amount of substantive and controversial legislation through Congress as the day when her allies lose their working majority fast approaches.

The government has surprised many with its ability to marshal its forces after a June 28 defeat in midterm elections and a slump in popularity. Rather than toning down the rhetoric, the government has gone on the offensive.

"It's a question of numbers. They have the majority and they want to make the most of it," said Silvia Lemos, an opposition representative for the Radical party. "I congratulate them because after the defeat in the last elections they have knitted various alliances to be able to impose the bills which the executive has sent."

The efforts have also revived the chances that Fernandez or her husband and predecessor, Nestor Kirchner, will be able to mount another challenge for the presidency in 2011. They've been helped by continual bickering among and within the numerous opposition parties, which makes it hard to envisage a clear rival for the top office at this point.

The breadth of the issues which the government has taken on has left many a head spinning and most Wednesdays, when plenary votes are usually held, have become cable news marathons. From extending extraordinary presidential powers, restructuring the media industry and overhauling the political system to extracting human tissue for identification purposes and the mundane but complex budget bill, the pressure has been constant.

This week, the government presented a plan to revise the tax system for self- employed workers and the Labor Minister said the president will sign a decree to push through changes to worker insurance legislation.

There's usually broad agreement that existing laws need to be modernized. But where supporters see progress, opponents see sleight of hand, believing the government is using this legislative blitzkrieg to throttle its enemies and increase its grip on power.

The media reform law, which was approved last month, replaced a previous piece of legislation which was passed in 1980 at the height of the last military dictatorship. That in itself was stigma enough, but for an industry which has made such incredible advances over the last two decades, the law was clearly outdated.

Yet critics see the new law as a large mallet with which the government will be able to smash Argentina's largest media corporation, Grupo Clarin SA(GCLA.BA) .

Other bills are more populist in nature. Higher child welfare payments, better compensation for injured workers and, perhaps most significantly, a government takeover of the local football television rights are all likely to play well in the elections.

It's anyone's guess as to how the opposition will perform once they take control of Congress in December. Some tentative agreements seem to be developing to allow the opposition to challenge for the leadership of key commissions in Congress.

Whether they're able to actually pass legislation, or even reverse recent changes, seems less likely. The government may lose some of its heft in Congress but it still retains wide-ranging powers to issue decrees and alter budget spending without any legislative oversight.

Meanwhile, the ruling Front for Victory party will remain the largest bloc in Congress, giving it a great deal of sway over opposition parties that are often bitterly divided.

President Fernandez is also expected to increasingly wield her veto to stave off any opposition advances. Overturning a veto requires a two-thirds approval among legislators, and the opposition may be hard pressed to reach that higher benchmark.

"Everything depends on the executive," said Ana Maria Mustapic, a political analyst at the Torcuato Di Tella university. "The executive will decide whether there's more space for cooperation, or more conflict."

-By Matthew Cowley, Dow Jones Newswires; +54 11 4103 6740; matthew.cowley@ dowjones.com

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