Opposition splits in response to PRI budget
The first major legislative confrontation in the Mexican Chamber of Deputies between the new opposition majority that emerged from the July 6 mid-term elections and the government and the ruling Institutional Revolutionary Party (PRI) ended in a major victory for the regime. Peter Gellert
The united (although fragile) opposition - the congressional caucuses of the left-of-centre Party of the Democratic Revolution (PRD), the conservative National Action Party (PAN), the Green Ecologist Party (PVEM) and the Workers Party (PT) - clashed with the PRI and government in the second week of December, concerning the 1998 budget and fiscal policies proposed by President Ernest Zedillo.
The main controversy involved the unpopular sales tax, increased to 15% following the December 1994 economic crisis. The opposition bloc used its majority to reduce the tax to 12%, rejecting Zedillo's fiscal policies and thereby potentially leaving the government without funds to operate.
The government and the PRI were outraged. They are not accustomed to having to negotiate with other parties if they want their bills passed by the Chamber of Deputies.
The powers that be-PRI, government, business associations and the official labour movement as represented by the Mexican Workers Confederation (CTM)-reacted swiftly and strongly. PRI congressmen forcibly seized the Chamber of Deputies presidium following the vote. PRI national leader Mariano Palacios Alcocer charged that opposition with waging an "institutional war" , seeking to paralyse government functioning by its "irresponsible and inconsistent" attitudes.
Zedillo himself declared that if the sales tax was reduced, it would be impossible for the federal government to meet its commitments to the states and Mexico City, that current economic results and potential growth would be put in jeopardy, that public finances would deteriorate, inflation would increase and consumer purchasing power drop.
Not surprisingly, the Confederation of Mexican Workers (CTM) and its affiliated unions while offering verbal criticisms of the effects of the crisis, vociferously backed Zedillo's proposals. "Lowering taxes... is not the best way to redistribute income, because with less (government) income, there are fewer social expenditures," a CTM statement said. In newspaper ads the pro-government labour confederation voiced its opposition to "irresponsible adventures" such as lowering the sales tax, and proposed a series of alternative measures. Though PRI deputies belonging to the CTM made so such concrete proposals when it came time to vote.
The opposition stood firm, however. The bill to reduce the sales tax was approved and sent to the Senate, where it was defeated by the PRI majority, and returned to the Chamber of Deputies, which again passed the proposal and returned it to the Senate, which finally put the initiative on ice. The sales tax remains at 15%.
On December 11 and 13, following a meeting with Zedillo, the PAN (conservative) congressional and senatorial caucus voted with the PRI to approve the president's budget and fiscal policies. This was the first time the opposition bloc divided its votes.
The approved budget allows the president to increase the foreign debt by five billion dollars and the internal debt by eight billion dollars. It does not include opposition demands to raise the minimum wage, which issued as a standard for setting salary increases in most collective bargaining agreements. Nor did it eliminate the huge presidential slush fund (it was, however, reduced, as were budget outlays for bank rescue programmes) or do away with lucrative bonuses for public officials, as the opposition had demanded
The three parties voting against argued that the proposal gives the president absolute discretionary powers to up the country's debt. In full page advertisements in La Jornada, the left-of centre PRD explained that the budget places the cost of the economic crisis on the shoulders of the workers and on small and medium-sized businesses. PRD legislator Demetrio Sodi said that "the PAN sold itself for a plate of beans and backed the government's economic policy that it so often said it criticised."
In this important vote on the budget and fiscal policies, the government and PRI not only got their way, but may have succeeded in neutralising the challenge posed by an opposition majority in the Chamber of Deputies. The future of the opposition bloc is uncertain. * Source: Mexican Labor News and Analysis Vol. II, No. 23
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