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Mexico Senate Committee Backs Cutting 2011 Deficit
 Jason Lange - Reuters
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October 26, 2010
Mexico City - The Mexican Senate's finance committee on Tuesday approved a plan to trim the government's deficit next year, although not by as much as President Felipe Calderon had proposed.
The bill, which comprises the revenue portion of the 2011 budget, now goes to the Senate floor where it could win final approval this week. The lower house okayed it on Oct. 20.
The changes in Congress to Calderon's budget plan mark a fresh setback for the conservative leader, who has presided over Mexico's deepest recession since 1932 as well as nearly 30,000 gangland murders in the nation's drug war.
Under the bill, the government would go into the red next year by the equivalent of 0.5 percent of gross domestic product, although that figure does not include lofty borrowing by the state oil company, whose debt is seen to carry an implicit government guarantee.
Calderon had proposed cutting the deficit to 0.3 percent of GDP from this year's planned 0.75 percent.
He hopes to balance the budget by 2012 to make a case for a better debt rating after Mexico was downgraded last year by two rating agencies.
But Calderon has not held a majority in Congress since taking office in December 2006, and the opposition has blocked or watered down most of his economic reform agenda. His office did not respond to a request for a comment.
(Editing by Kim Coghill)
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