For First Time, Mexico Holds a Budget Debate

After seven decades of absolute ruling party control over the national budget, the Mexican Congress on Tuesday opened a new era of democratic governance as opposing parties began wrangling and horse-trading over the government’s annual spending plan.

Finance Minister Guillermo Ortiz acknowledged the drastic shift in Mexico’s political process as he introduced the budget in the lower house of Congress, declaring that “the willingness for dialogue and the search for agreement in the meetings between the executive branch and legislature on economic issues are promising signs.”

As Ortiz recognized the legislators’ contribution, Porfirio Munoz Ledo, leader of the left-leaning opposition Democratic Revolution Party, or PRD, exclaimed: “At last, man! It’s the end of the ayatollahs.”

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The longtime dominance of the Institutional Revolutionary Party, or PRI, began unraveling July 6 when four opposition parties won a total of 262 seats in the 500-seat lower house, leaving the PRI with 238. The budget debate that started Tuesday is seen as the first major test of how the realignment in Mexican politics will play out in national decision-making in the years ahead.

While opposition parties criticized aspects of the spending plan, they were as determined as the PRI leadership to appear committed to avoiding deadlock and reaching agreement during the budget debate, which is supposed to conclude by Dec. 15.

“I’m glad that a willingness exists to discuss and be open to analyzing the various proposals from the different political parties,” said Carlos Medina Plascencia, leader of the right-of-center National Action Party, or PAN. “This could open a space for us to arrive at certain consensus and leave our differences for later.”

In recent weeks, opposition leaders on the left and right have become more muted in their demands for budget revisions ranging from tax cuts to sharp increases in the minimum wage--which has shrunk to just over $3 a day. In turn, Ortiz met with opposition legislators more than 20 times in the last few weeks, seeking to build into the budget a number of congressional demands that would smooth the way toward approval, including a steep increase in anti-poverty programs.

Ortiz said these concessions include a significant decentralization of control over spending from the national government to the 31 states.

Furthermore, the president’s discretionary funds--often alleged to have been a PRI tool for buying votes--have been placed under greater congressional scrutiny.

The budget projects a deficit of 1.25% of the gross domestic product, a comparatively small figure that has been applauded by financial analysts as a sign of tight control over spending. The annual growth rate is projected to be 5.2%, with inflation falling from an expected 15.5% this year to 12% in 1998.

President Ernesto Zedillo has said these healthy indicators justify the harsh measures Mexico enacted after a drastic peso devaluation in 1995 plunged Mexico into its worst economic crisis in six decades.

In recent days, he has accused opposition parties of proposing “populist” tax cuts and spending increases, which Zedillo said would jeopardize the economy’s recovery by igniting inflation and damaging Mexico’s favorable image in the eyes of international investors.

The left-leaning PRD has argued that ordinary citizens have been punished for too long by the austerity measures and that the recovery is strong enough to withstand increased social spending, especially for the poorest sector. The PAN, on the other hand, is pressing for a tax reduction to stimulate consumption.

Such arguments in the past have been theoretical; the PRI has controlled the legislature as well as the executive branch since the party was founded in 1929.

The PRI losses in the July election, coupled with the subsequent ability of the left-wing and right-wing parties to cooperate on votes against the PRI, have injected an unprecedented degree of opposition influence into the system.

Ortiz, in a briefing with U.S. reporters after his budget address, said: “Obviously, there will be much discussion in the days ahead. It is evident that we don’t pretend to be the owners of the truth. We want to be persuasive.”

The PRD’s Munoz Ledo said of Ortiz’s address: “His attitude is very republican. . . . The way he spoke was very respectful, which is a sharp contrast with the arrogance [of the PRI] shown in the past. I am satisfied with the tone, but we’ll see how it translates into reality.”

Some political analysts wondered whether the apparent harmony will last--and whether it should last. Denise Dresser, a political commentator here, said: “Mexico will begin to experience the vagaries of a true legislative life, with all the chaos and uncertainty that that entails.

“The very way in which economic policy has been formulated in this country changes in a dramatic fashion,” she added. “In the past, economic policy had been in the hands of a very small, close-knit group of politicians who were basically accountable to no one.”

Jeffrey Weldon, a political scientist at the Autonomous Technological Institute of Mexico, said the budget process “is a test of how well the branches of government can work together. . . . I think that Mexico will show if it’s really democratic by having a bit of instability in this process. If they go to the brink a little bit, maybe a couple days of no budget isn’t a bad thing. It shows that both branches are co-equal.”

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Opposition congressional leaders understood the significance of their enhanced policy role.

Santiago Creel, a PAN committee chairman, said the budget debate “is a fundamental step in the advance of our incipient democracy given that for the first time the core of public policy in our country--the national budget--will be up for true debate. This is an unprecedented moment.”

Mexico City Bureau researcher Rob Randolph contributed to this report.