NEW LEGISLATIVE SESSION TO BE LONG ON RHETORIC, SHORT ON

C O N F I D E N T I A L SECTION 01 OF 04 MEXICO 000085

SIPDIS
WHA DAS JACOBSON
NSC RESTREPO AND O'REILLY

E.O. 12958: DECL: 2020/02/02
TAGS: PGOV PREL MX
SUBJECT: NEW LEGISLATIVE SESSION TO BE LONG ON RHETORIC, SHORT ON
PROGRESS

CLASSIFIED BY: Gustavo Delgado, Political Minister Counselor; REASON:
1.4(B),(D)


1. (C) Summary. Parties are geared up for the new legislative
session, which appears unlikely to result in the passage of major
reforms. Political reform, security, and economic issues are all
on the table, and progress will be incremental and compromised as
key players focus more on the upcoming local and state elections
than legislative matters. Mexican political parties remain
reluctant to put aside ballot box concerns to achieve the difficult
and profound reforms needed to meet Mexico's overarching
challenges. End Summary.



Not Playing Nice

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2. (C) Parties are geared up for the new legislative session,
which opened on February 1, which Revolutionary Institutional Party
(PRI) contacts say is unlikely to bear significant fruits of
reform. The party is not looking to significantly alter its
strategy of engaging with the Calderon government on popular
initiatives while still looking to score public relations points by
wrangling over less publicly accepted policies, such as price
increases on food and fuel. The series of state and local
elections this year, including twelve governorships, have
complicated the legislative atmosphere. PRI insiders tell Poloffs
that the National Action Party (PAN) and the Revolutionary
Democratic Party's (PRD) tenuous agreement to form alliances in at
least four heavily PRI states, including Puebla, Oaxaca, Durango,
and Hidalgo, have rankled the party. Silvio Lagos, a PRI deputy
from Veracruz, where the governorship is also up for grabs this
summer, told Poloffs the party will look to punish the PAN for
entering into the ideologically "unnatural" alliances by depriving
it of legislative successes this session. Carlos Casillas, a PRI
insider and director of the Chamber of Deputies' Center for Social
and Public Opinion Research, gave Poloffs a slightly more nuanced
perspective and said the PRI will stall on passing any important
legislation until after the bulk of the candidate selection
processes - which will formalize any party alliances - close in
April, and will hone its congressional strategy according to the
outcome. Alliances or not, Casillas does not expect major advances
until after the twelve contests for governor on July 4. PRD
contacts, meanwhile, have told Poloff that PRD legislators will use
its minority alliance with the Workers' Party (PT) and Convergencia
in the Senate and Chamber as a spoiler for legislation presented by
PRI, looking for ways to gain points and pick up leftist voters in
the upcoming elections.



PRI Fractious

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3. (C) In addition to clear divides between competing
congressional blocs, the PRI hardly seems coordinated on what its
specific agenda items will be in both chambers. Such
inconsistencies are in part due to the greater hold governors tend
to have over deputies than senators. The PRI Chamber bloc will
likely be more vociferous in its opposition to the PAN and less
likely to compromise on controversial issues in the run-up to the
elections than its Senate counterpart. For example, the powerful
leader of the PRI Senate bloc, Manlio Fabio Beltrones, has publicly
suggested a fiscal reform bill that would include a lower rate on
the value added tax but broaden its applicability to a greater
number of goods. In answer, the leader of the Chamber's PRI
caucus, Francisco Rojas, said that Beltrones' proposal was personal
and did not reflect the party's position. He noted that the PRI's
party bylaws prevent it from supporting the application of the tax
to food and medicine. For their part, PRD contacts have been
unable to articulate to Poloff a coherent legislative strategy,
mostly because it can hardly tear its eyes from election

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preparation issues to focus on other issues.



Potential Agenda Items and Prospects

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4. (SBU) Budget negotiations and wrangling over committee
assignments consumed the last congressional session, leaving little
time for substantive debate over other issues. This session,
conversely, will likely feature a great deal of debate, but again,
with less real progress. Agenda items will include a broad swath
of political, security, and fiscal proposals.



Political Reform the Headliner

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5. (C) Political reform has been a top news story as the Senate
opened a forum last week for discussion on the issue. Calderon
proposed in December a ten point plan billed as steps forward in
Mexico's democratic development, which includes such measures as
the reelection of federal deputies and local officials, a reduction
in the size of Congress, allowing the executive branch to present
two priority initiatives at the start of session that would require
action by the end of session or automatically become law, and
giving the President the right to present comments on laws and the
budget passed by Congress (ref a). Political reform had been
described by contacts of all three major parties as a potential
area for advancement, but the tenor of the debate has markedly
changed since the presentation of Calderon's proposal.




6. (C) While several of the items have long been discussed in
political circles and have even been previously proposed to
Congress by various parties, the President's proposal has not
received much support from PRI and PRD rivals. Some of the PRI's
public opposition is probably geared toward electioneering, and all
of Calderon's initiatives are not anathema to the party.
Nevertheless, Carlos Casillas noted that the PRI's primary
objectives for any reform package include securing the "Chief of
Cabinet" position, strengthening Congress at the cost of the
executive, and preserving the power of PRI governors. Casillas
said that many PRI leaders, PRI President Beatriz Paredes and
Beltrones included, see themselves as Chief of Cabinet - a sort of
hyper-vice presidential position - in the possible future
administration of Mexico State Governor Enrique Pena Nieto. He
said that the PRI is cool to reelection of mayors, since the reform
is viewed by the party as a way to weaken the authority of
governors. Local press reports indicate Beltrones will present a
PRI counterproposal to the Senate in the coming weeks that may
include constitutional changes to mandate legislative ratification
of all cabinet posts and allow for Congress to ask for cabinet
members to resign. It may not include Calderon's proposed
independent candidacies. Fundamentally, the PRI will be reluctant
to back any measures that chip at its powerbase, currently
including Congress, governors, and the strength of its own party
machinery (such as allowing for independent candidates to
participate in elections). Other proposals, such as increasing the
minimum vote requirement from two to four percent for party
registration, strike at smaller parties and thus will find hostile
reception from the PRD, which relies on smaller partners like PT
and Convergencia to build electoral coalitions. Congress will
certainly debate the proposals, but progress may be less
fundamental and more focused on issues like changing congressional
procedures to increase legislative efficiency and the PRI's
proposal to bring back the President's personal delivery of the
state of the union address.

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Security Issues Have More, but Still Limited, Potential

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7. (C) There may be hope for advancement on some security issues,
although major outstanding reforms may outlast this session. PAN
Senator Felipe Gonzalez Gonzalez, president of the Public Security
Committee, told Poloffs that the PAN's security agenda will include
discussion of the federal anti-kidnapping laws, as well as criminal
procedural codes necessary for implementing federal judicial
reform. Also on the agenda are reforms of the National Security
Act submitted by Calderon in April 2009 that would regulate the
role of the military in the counternarcotics fight and broaden the
President's authority by allowing him to declare a threat to
domestic security and deploy the military accordingly (ref b).
Both PAN and PRI contacts told Poloffs that some progress could be
made on the criminal procedural codes. However, USAID contractors
working on the reform have suggested that prospects for their
successful passage this session seem dim unless the Senate revives
previously presented legislation or the Chamber produces an
entirely new bill. The reorganization of municipal police into 31
state-run entities (ref c) will also be on the table, and Casillas
noted there is support amongst the PRI for the measure. Gonzalez
demurred, however, when asked about PAN support, and said it is a
complicated issue both legally and politically. The National
Security Act reform as proposed by Calderon likely is dead in the
water, as the PRI and PRD are highly unlikely to back an expansion
of executive authority.



Major Economic Successes Unlikely

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8. (C) On economic issues, the GOM has said that fiscal reform is
not among its top priorities this session, and contacts from the
Finance Secretariat told Econoffs that it would only consider a
serious, holistic package, which does not appear to be in the
hopper. Finance Secretary Ernesto Cordero, during a recent trip to
the United States, said that political reform, PEMEX's new
contracts, and telecommunciations spectrum auctions were top GOM
priorities. Other Finance Ministry officials have said that the
recently approved tax reform was enough to generate resources for
the next few years. Some tax rate changes are possible since
sectors from the PAN and PRI have both mentioned a decrease in the
value-added tax, and parties may try to use taxation to undercut
each other in the run-up to the July vote. The PRI Chamber bloc
has publicly said that its fiscal efforts will be geared toward
ensuring greater transparency and accounting of federal government
spending. It will also work for more rapid and thorough audits of
GOM expenditures over the past several years. Additionally, the
PRI has said it will seek the decentralization of social spending,
a familiar refrain as the party looks to boost the power of its 19
governors and one the PAN will not back.



Comment

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9. (C) Congress, which the Mexican public already ranks as one of
the least respected institutions in the country, will have to
advance on some issues in order to have something to show for three
months of work. Nevertheless, this session is likely to feature

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more talk than progress as parties concentrate on campaign and
electoral intrigue. Mexican political parties are congenitally
focused on the next electoral cycle and are reluctant to put aside
ballot box concerns to achieve the kinds of difficult and profound
reforms needed to press forward with Mexico's democratic, economic,
and security development.
FEELEY