The News
Wednesday 24 of April 2024

On Debt And Taxes

José Antonio Meade Kuribreña at the Chamber of Deputies discussing the 2017 economic package,photo: Cuartoscuro/Saúl López
José Antonio Meade Kuribreña at the Chamber of Deputies discussing the 2017 economic package,photo: Cuartoscuro/Saúl López
Secretary Meade Kuribreña also spoke of the ongoing peso devaluation

As expected, Treasury and Public Finance Secretary (SHCP) José Antonio Meade Kuribreña staged a caper Thursday at the Chamber of Deputies defending President Enrique Peña Nieto’s 2017 budget proposal.

Nevertheless, many of the 500 deputies listened stone-faced, given the brutal slashing the president carried out on the budget, hurting the ever growing poor population whose subsidies have been chastised for next year.

In fact, Democratic Revolution Party (PRD) president Alejandra Barrales said immediately after the budget presentation was over that her party would not give a vote of approval to the budget, which in her terms aims at cleaning up the president’s squandering of funds and acquiring public debt for no visible purpose.

But the debt is there and has to be paid. Meade Kuribreña in an interview after his appearance at the Chamber of Deputies retorted to the refusal to approve the budget, threatening that if they don’t there will be less growth and more poverty.

According to Meade Kuribreña, the budget “must” be approved because it contains the necessary elements to confront the risks of international financial volatility, maintain economic stability and push for increased growth maintaining low inflation and job creation.

The one question Meade Kuribreña could not answer was how we got here over the past four years of the Peña Nieto administration, particularly on the subject of borrowing money that is forcing the nation into the brutal 239 billion peso ($12.1 billion) budget cut.

In tandem with the official statement that “there are nations worse off than us,” that has been heavily touted by President Peña Nieto in the past, Meade Kuribreña mentioned the case of Japan, which thrives notwithstanding that it owes twice the size of its gross domestic product.

But the one thing he did promise was that the nation is not borrowing any more money.

“Further increasing the nation’s debt over what’s already planned may lead to the loss of confidence in us, which might result into abrupt and substantial consequences in the cost of paying [interest rates] and would further reduce the allotted budget for next year.”

He further defended the president’s expenditures proposal for 2017, say that it “is different” if compared to those of previous years, as it was designed to meet current needs.

“The proposed package recognizes that you cannot at the same time decrease the debt and taxes. It recognizes also that we cannot reduce the programmed expenditures if we declare each of the chapters, if we take the attitude that each of the chapters is untouchable. By presenting adjustments on all the chapters, we’re trying to have, by the same token, a shared challenge.”

Most of the left wing deputies challenging the president’s budget proposal contradicted Meade Kuribreña, predicting that the results by the end of 2017, if this budget is approved as is, will indeed cause what is trying to be prevented, an increase in the number of poor in the nation.

In his constant defense of the president’s budget proposal, the finest value of the management of the nation’s finances has been keeping inflation below 3 percent for the past four years. “And this is something we’ve got to be on the alert for, as we must work on keeping those low inflation levels. The finest thing we can do is send to the international community signs of certainty with a responsible economic package such as the one the president has delivered to Congress.”

Secretary Meade Kuribreña also spoke of the ongoing peso devaluation which is indeed a shame to the president’s management of the economy, but Meade found out that the president is not to blame for it. But if not the president, who? You might ask.

Donald Trump, of course.

Well in the end, no news is good news. Secretary Meade Kuribreña went to Congress to do the impossible, that is, defend President Peña Nieto’s budget proposal, which is not making anybody happy, because at the end of the reel what stands out is the nation’s debt, something the Peña Nieto administration got the nation into.

But then, Meade Kuribreña can’t be blamed for that; his was indeed a daunting task to a Congress that, even in protest, has got little to choose from.