Congress rushes to reshuffle 40 billion pesos of FY 2025 budget

December 10, 2024

Mexican Federal Deputy Sergio Gutiérrez and head of the board of directors of the Chamber of Deputies rings a bell in to open session. He's sitting at a desk at the head of the Chamber with other members of the board of directors sitting on either side of him and other lawmakers standing behind them, conducting other business — Federal Deputy Sergio Gutiérrez, President of the Chamber of Deputies directive board, opens the Chamber's second session on Tuesday. (Mario Jasso/Cuartoscuro)

The clock is ticking on Mexico’s 2025 budget as Mexico’s Chamber of Deputies scrambles to rework the spending portion of the 9.3 trillion-peso (US $461.08 billion) budget submitted by President Claudia Sheinbaum before a final vote is expected on Thursday.

By Tuesday afternoon, deputies with Morena — the ruling party in the Chamber — had reportedly hammered out a proposal to reassign 40 billion pesos (US $1.98 billion) of the budget, with the National Electoral Institute and the judiciary suffering the biggest reductions.

Group of federal deputies sitting in session in Mexico's Chamber of Deputies in Mexico City — Ricardo Monreal, head of the Morena party’s caucus in the Chamber of Deputies, center, originally told reporters Monday that the Chamber would debate 30 billion pesos (US $1.5 billion) in reallocations of Claudia Sheinbaum’s 2025 budget. By Tuesday, that amount had grown to over 40 billion (US $1.98 billion)

The Budget Committee was poised to debate the resolution later Tuesday. Floor debate would then be scheduled for Wednesday, with a final vote set for Thursday.

Mexico’s budget challenges are significant, especially as Sheinbaum’s declared goal is to lower the nation’s deficit by increasing revenues and reducing expenditures. Mexico’s budget deficit is expected to close the year at negative 5.9%, according to the news agency Reuters.

Sheinbaum’s proposed spending cuts deprioritized sectors such as Mexico’s defense, with a 44% cut compared to the last budget, and security, which saw a 36% cut, Reuters reported. Environmental spending was also down 39% in the proposed budget, and educational institutions saw a 14% reduction.

Opposition to the budget was quick to arise after it was revealed on Nov. 15 — especially regarding cuts to public universities and cultural institutions — and some circumstances changed.

Among those changes was the elimination of seven autonomous Mexican agencies at the end of November, which freed up 4.4 billion pesos (US $218.2 million). Sheinbaum let Congress know she was willing to negotiate while insisting that some institutions must accept austerity.

Morena Deputy Ricardo Monreal, the leader of the ruling party’s caucus, told reporters Monday that the Chamber would be in session Tuesday and Wednesday to work on the proposed changes, with committees and caucuses hastening to crunch numbers amenable to Sheinbaum and the Finance Ministry.

Mexico's Supreme Court Chief Justice Norma Pina standing at a podium giving the judiciary's annual report to the nation. — One of the bigger cuts will be to Mexico’s judiciary, which will undergo major structural changes in 2025. On Tuesday, Supreme Court Chief Justice Norma Piña, who heads Mexico’s judiciary bodies, made her annual report to the nation. (Cuartoscuro)

Initially, the Chamber announced it would work to redistribute 20 billion pesos of the budget to favor universities and cultural institutions shortchanged in the initial budget (the Finance Ministry admitted to a clerical error that inadvertently reduced funds for two major public universities).

On Monday, Monreal announced that Morena had identified 30 billion pesos that could be reapportioned and that his caucus would present the proposals to the opposition and in committee, according to the newspaper El Universal.

Monreal specifically identified the INE and the Federal Electoral Tribunal (TEPJF) as targets for reduction, as well as Mexico’s judiciary.

At the same time, Sheinbaum made it clear that she wanted the Defense Ministry budget increased, prompting Monreal to urge Morena deputies to allocate more money to fund military pay raises, as well as road infrastructure, particularly in Mexico’s rural areas.

On Tuesday morning, a proposal had taken shape. The newspaper El Financiero reported that the resolution circulating in the Chamber of Deputies called for slashing 14 billion pesos from the judiciary and 13 billion pesos from the INE.

The Chamber also proposed reducing Congress’ budget while also reassigning funds from the executive branch, several cabinet ministries and a few regulatory agencies.

The changes proposed would increase the defense budget by 6.3 billion pesos, set aside an additional 10 billion pesos for roads and infrastructure and restore the cuts in funding to universities, including the National Autonomous University (UNAM), whose funding will be restored by 5.5 billion pesos (US $272.7 million), which comes to about 127 million pesos (US $6.3 million) more than UNAM had in 2024.

Overall, if the reworked budget were to be approved, educational institutions would in total be granted 17.3 billion more pesos than had been assigned in the original budget.

With reports from Infobae, El Financiero, Expansión Política and Animal Político