Mexican Senate OKs fiscal reform policies
MEXICO CITY -- The Mexican Senate approved a much-needed but hotly disputed fiscal reform Friday, handing President Felipe Calderon his second major congressional victory since he took office late last year.
In achieving the measure, the politically savvy Calderon has accomplished in his first nine months what his predecessor could not pull off in his entire six-year term.
The reform does not come without a cost, however: The measure passed by lawmakers is a watered-down version of the original proposal and was obtained in exchange for the passage of an electoral reform demanded by the opposition.
The fiscal reform includes taxes on gasoline, corporations, gambling and some major stock market transactions, and also includes a 2 percent tax on cash bank deposits exceeding $2,250.
The lower House passed the reform Thursday, as did Senate committees. The full Senate approved the measure Friday.
The tax reform represents yet another victory in Congress for Calderon, a former legislative leader who has managed to negotiate political deals in a way that his predecessor, Vicente Fox, could not.
Fox, also of the National Action Party, made history with his election in 2000 by ending 71 years of one-party rule, ushering in a new era of democracy for Mexico.
While the former federal legislator and Coca-Cola executive was able to make deals with Congress on some issues, he failed to pass major fiscal, labor, energy and judicial reforms. One of his budget proposals eventually wound up in court because of fervent congressional opposition.
After taking the oath of office on Dec. 1, Calderon obtained easy passage of his first budget proposal later that month. And earlier this year he pushed through a major state-worker pension reform bill that was violently opposed by workers and opposition politicians.
To achieve those milestones, Calderon had to compromise: The current fiscal reform includes taxes that are lower than those he initially proposed, as well as an opposition-demanded reduction of the tax burden on state oil monopoly Petroleos Mexicanos, or Pemex. When it came to passing his budget last year, Calderon agreed to include funds for governors' pet projects.
Some Mexican commentators and political analysts have wondered if Calderon gave away too much this time by agreeing to the electoral reform, passed by the Senate on Wednesday and approved by the lower House on Friday.
That measure requires Mexican television and radio stations to broadcast political ads for up to 48 minutes a day without any financial compensation and will replace all board members of the semiautonomous Federal Electoral Institute, which oversees Mexico's elections.
The political-ad provision has infuriated the powerful broadcast industry, and some intellectuals have expressed concern that the wholesale removal of the electoral institute's members will threaten its independence.
Others say the board has always been politicized, and Calderon's deals in Congress are political maneuvering necessary in a still-struggling democracy.
The concessions are "an understandable trade-off," said Mexico expert George Grayson of the College of William & Mary in Virginia.
"The greatest danger to a country that's striving for democracy is that you have a paralysis of the institutions," Grayson said. "That's what we found with Fox."
With Calderon, on the other hand, "you've got the parties (in Congress) working together" and forming alliances with the president, "and you look forward to the next challenge, hoping to be successful with a more ambitious proposal."