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 News Around the Republic of Mexico | December 2006 
President Calderon Presents Budget
 Lisa J. Adams - Associated Press
| | Mexican President Felipe Calderon, left, speaks during the announcement of his 2007 budget in the Los Pinos presidential residence in Mexico City on Tuesday Dec. 5, 2006. At right is Mexico's Treasury Secretary, Agustin Carstens. (AP/Dario Lopez-Mills) |
Mexican President Felipe Calderon — under pressure to promote the social programs his leftist rival championed — presented an austere budget Tuesday that increases spending for social programs to help the country's poorest.
The $205 billion budget includes a 10 percent reduction in Calderon's salary and that of other top government officials. The salary cuts would free up about $2.5 billion in the next year, or enough to build about 2,500 schools.
Calderon also promised to send a government spending bill to Congress that builds long-term savings.
"I'm committed to transparency and accountability," he said.
Former presidential candidate Andres Manuel Lopez Obrador, who lost the July 2 election by less than one percentage point and is leading opposition to Calderon's administration, made slashing government salaries a central theme of his campaign, along with increased spending on social programs for the elderly and the poor.
Calderon, who took office Friday from outgoing President Vicente Fox, wants to increase spending on education by 4.2 percent and on health programs by 9.3 percent, in part to fund the expansion of a program that offers insurance to the poor.
Other areas that will receive more money in the budget are housing and public safety. Calderon has promised to crack down on corrupt police and rampant kidnappings and drug murders, and to increase the salaries of the lowest-paid members of the police, army and navy.
Calderon called for combatting tax evasion and said the budget supports the creation of small and medium businesses to create jobs. The budget anticipates 3 percent inflation and 3.6 percent growth in gross domestic product.
Calderon said his proposed budget, which represents a 9.4 percent increase over the 2006 budget, was realistic in the context of international finances, including a projected decrease in the U.S. economy's growth as well as a drop in oil prices and in Mexico's oil production capacity next year.
Lopez Obrador, who pledged that as president he would cut top government salaries by half, called Calderon's proposed 10 percent cut a "farce," noting that even after the reduction, the new president would still earn three times more than the president of Chile and nearly twice as much as the prime minister of Spain.
Calderon's salary has still not been announced, but Fox earned about $245,000 this year. After a 10 percent cut, that would be $220,500. By contrast, Chilean President Michelle Bachelet will earn $72,000 this year, while Spanish Prime Minister Jose Luis Rodriguez Zapatero will make $117,000. President Bush makes $400,000 annually.
Calderon, who campaigned on promises to aid the poor through job creation, has come under pressure to focus more heavily on social spending in an effort to steal some of Lopez Obrador's thunder and earn the support of the 14.7 million Mexicans who voted for the former Mexico City mayor.
Regardless of whether the budget cuts produce the savings Calderon anticipates, they are unlikely to have a major impact on the rest of the government's economic activity, said Mario Correa, an economist at Scotia Casa de Bolsa in Mexico City.
"I think it's more likely a clear message about the social objectives that President Calderon is trying to meet," he said. "And in that sense, it is a positive message that he is very conscious that Mexico is a country that still has a lot of needs and setbacks and that he is going to focus on attending to those." |
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