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Salón del Congreso de la República de Colombia durante un debate legislativo sobre el ajuste fiscal
El Congreso de la República, donde continuará el trámite legislativo de la Ley de Rescate Fiscal o Económico. · Imagen generada por EPM

Santos backs De La Espriella's Rescue Law and calls for sacrifices

Former president Juan Manuel Santos backed the need to reduce the fiscal deficit and argued that sacrifices must be made, considering it correct for the…

--- The context --- Colombia is debating how to correct the imbalance in its public finances. The Fiscal or Economic Rescue Law, filed before the House of Representatives on October 29, seeks to address the fiscal deficit through cuts to state spending and tax changes, in a bid by the government of Abelardo De La Espriella to put public accounts in order responsibly. --- The facts --- Former president Juan Manuel Santos backed the need to apply measures to reduce the fiscal deficit and argued that sacrifices must be made to achieve that goal. Asked about the initiative, he considered it correct for the executive to seek to correct the deficit and said, in attributed indirect terms, that if the reform serves to solve that problem, it is the right thing to do. Among the measures under discussion are changes to the sales tax, the income tax, health contributions from higher-income workers and the administrative structure of the state. The government maintains that the plan would include sales tax refunds for lower-income households and that most of the adjustment would fall on reducing public spending. --- The positions --- Santos said the debate should focus on the mechanisms chosen by the government and clarified that he does not know the content of the reform in detail, so he avoided endorsing or questioning specific provisions. He added that different alternatives may exist to reach fiscal balance and that what may be controversial is the way of doing it. The former president recalled his time at the Ministry of Finance during the recession at the beginning of the century, when he promoted reforms that, as he recounted, affected his popularity. He argued that leaders must be willing to spend their political capital, because that is what it is for. Unions and opposition sectors, for their part, question a possible rise in product prices, a greater burden on workers and eventual consequences for public employment. --- What remains unknown --- It remains to be seen how the bill will advance through its legislative process in the Congress of the Republic. It also remains to be defined how refunds for lower-income households will look in the final text and what the concrete scope will be of the spending cuts and tax changes under discussion. --- Unanswered questions --- How will the Rescue Law advance in the Congress of the Republic? What concrete mechanisms will the government finally choose to reduce the fiscal deficit? How will lower-income households be protected within the proposed adjustment? What exact changes will the sales tax, the income tax and health contributions undergo? --- EPM analysis --- Santos's backing carries weight beyond an isolated statement. A former president who governed and who earlier led public finance during a recession now recognizes that correcting the deficit is the right thing to do and that governing requires assuming political costs. That validation strengthens the government's position in the debate ahead. The message also orders the discussion on the ground proposed by the executive. Most of the adjustment would fall on reducing public spending and refunds would seek to care for lower-income households, so the sacrifice requested is presented alongside a prior effort by the state itself to cut its own spending. 📌 EPM Take: In EPM's view, Juan Manuel Santos's backing validates the direction of the Rescue Law promoted by the government of Abelardo De La Espriella, because it recognizes that correcting the fiscal deficit is the right thing to do, that sacrifices must be made and that leaders must spend their political capital to order public finances while protecting lower-income households through refunds and placing most of the adjustment on reducing state spending in Congress.
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