Why Chile’s president should have the last word in public spending
Chile’s president should retain the exclusive right to set public spending initiatives, with congress attaining some influence in the process, according to the former head of the country’s central bank, Rodrigo Vergara.
The president’s public spending prerogative is being increasingly questioned as part of the process to write a new constitution and lawmakers have been demanding influence in public spending decisions for a while, Vergara said during a webinar hosted by the construction chamber (CChC).
Vergara suggested creating a group of lawmakers that presents spending initiatives to the president, who can advance or reject them.
“If he or she decides not to sponsor, it must be on substantial grounds,” Vergara said.
Vergara developed the proposal with the vice president of Chile’s autonomous fiscal council, Jorge Rodríguez, who said that the mechanism would serve as an “escape valve” for tensions related to presidential authority without undermining it.
Before assigning spending power to the president, lawmakers created public jobs and services and increased pensions, but often failed to secure financing.
“This could work once or twice, but as the years pass that will create an unsustainable pressure on public finances,” Rodríguez said.
Because the prerogative is seen to be attached to the 1980 constitution, which carries political baggage, both Vergara and Rodríguez think it might be abolished in the new one. Yet, both highlighted that the spending prerogative was originally implemented in 1947 as a constitutional amendment.
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