PRI challenges President on budget, calls for tax cuts

Even as the PRI leadership – Manlio Fabio Beltrones, Beatriz Paredes, and Francisco Rojas – met privately with President Calderón to discuss budget priorities, the party published an open letter to the President calling for an economic package with no new taxes and a rollback of the value added tax (VAT) from 16 to 15%. Undersecretary of Finance José Antonio Meade said the budget, to be delivered on the 8^th, would keep all taxes unchanged from current levels and called the proposal to cut tax rates “irresponsible” given the decline in oil production. Meade said the budget to be proposed would have a deficit of about 0.4% of GDP, and that a 1% cut in the VAT would cost about Ps. 35 billion. (Universal 9/7)

PRI puts social agenda ahead of political reform

The leaders of the PRI in Congress, Manlio Fabio Beltrones and Francisco Rojas, said the party’s congressional delegations agreed to make their legislative priority measures to ease the impact of the recession on people’s lives, and not the President’s political reform package. These include lowering school fees and toll road charges, increased penalties for crooked weights and measures in fuel sales, and limits on credit card fees, among others. PRI Senate spokesman Carlos Jiménez Macías said, “This is an agreement based on the urgent needs of the country, not the President’s priorities.” (Excelsior 1/29)

PRI leadership lashes out at alliances as ‘poison’

PRI party president Beatriz Paredes lashed out at the prospect of PAN-PRD alliances at a gathering of the PRI’s congressional delegation. She said: “To divide, confront, poison the atmosphere in the country, and to deteriorate the relationship with the majority party is not an intelligent formula; it’s not a formula at all, it’s folly. The majority leader in the Chamber, Francisco Rojas, called the alliances “a grotesque and surreal spectacle.” Columnist Salvador García Soto said the PRI is trying to send an unmistakable message: “If the PAN allies itself with the PRD in the states, tell the President he can forget about his reforms; let him see what he can get done working the perredistas.” (Universal 1/23, 1/23)

Expenditure budget passes

The budget commission of the Chamber of Deputies unanimously passed the 2010 expenditure budget at 4:30 am, after failing to meet the midnight legal deadline. PRI coordinator Francisco Rojas postponed four times the meeting of the full Chamber of Deputies, as factions within the party negotiated the reallocation of funds between the states and to different programs. The full Chamber is expected to vote on the package today. The final compromise was reflected in a basket of Ps. 96.6 billion of resources to be reallocated, an increase from the original proposal of Ps. 85 billion. Total expenditures were pegged at Ps. 3,176 billion – only marginally higher than the proposed budget sent by the Government.  One of the items that emerged from the congressional negotiations was the requirement that the Ministry of Finance present to congress an austerity plan by March 15 for longer-term improvements in the use of public resources. PRI deputy Sebastián Lerdo de Tejada explained, “We can’t ask the citizen to tighten his belt and not demand that the … executive, judicial, and legislative authorities do the same.”

The Templo Mayor column observed: “Almost everyone is content with the slicing up of the budget pie. The priistas are congratulating themselves because they … tied the hands of the federal government and got millions and millions as a gift for their governors. The panistas are also jubiliant; despite the dark warnings, at they end of the day they salvaged the resources for the three [social] programs dear to Felipe Calderón: the leafless Proarból, the coveted Oportunidades, and the supercharged Seguro Popular. (Excelsior 11/16, Universal 11/16, Reforma 11/16)

PRI partially backs liquidation

PRI Senator Francisco Labastida, the head of the Energy Commission, immediately backed the liquidation of LFC, saying, “there was no other solution.” The leader of the PRI in the Chamber, Francisco Rojas, however, criticized the government’s move as betraying “an anti-union policy … and the persistence of a privatizing instinct with respect to public sector energy companies.” Governor Enrique Peña Nieto of Mexico State, which is served by LFC, said he “respected” the decision and would work to ensure that electricity supplies were not interrupted. (Reforma 10/11, 13, Universal 10/13)

PAN proposes cutting party financing

PAN party president César Nava proposed a constitutional amendment to cut public financing for parties by 50%. The parties currently receive government funding of about Ps. 3.1 billion pesos per year, and Ps. 4.5 billion in election years, based on an automatic formula linked to the minimum wage and the number of registered voters. PRI congressional leader Francisco Rojas rejected the proposal, saying the savings would be minimal. “[Nava] wants to deflect public opinion to the political parties instead of focusing on the lack of willingness by the federal government to impose austerity [and] on the high level bureaucrats who command extraordinary salaries,” he said. (Reforma 10/9)

Anti-poverty levy hit as back-door tax on food and medicine

The opposition hit the proposed 2% anti-poverty tax as a back-door attempt by the PAN to introduce the value added tax on food and medicines, which are currently exempt. Senate coordinator Carlos Navarrete (PRD) declared the proposed new tax “dead and buried.”  The PRI was more cautious. Francisco Rojas, the PRI leader in the Chamber, said that while the PRI opposed taxing food and medicine, “There is nothing definitive; we are just getting a first impression. It will be several weeks before we have a position.” (Reforma 9/12)