Copper Law bill

Andrés Velasco, the hugely popular former Finance Minister of Chile, has an op-ed in La Tercera about the legislation to replace the Copper Law. In short, he hates the proposal. The basic problem, he argues, is that the new proposal still privileges the military in an undemocratic manner. Further, it adversely affects social spending:

Para ver lo insensato de esta ley, imaginemos que el país debe reasignar recursos para enfrentar una contingencia mayor, como un terremoto. De acuerdo a la “ley Allamand”, para financiar la reconstrucción no se podrá tocar el presupuesto de armamentos y la presión del ajuste caerá sobre el gasto social. Esto es exactamente lo que hizo Pinochet el año 82 para financiar el rescate de la banca. El gasto en defensa no se tocó y al final pagaron el pato la educación, la salud y las pensiones.  ¿Es eso lo que queremos para Chile en el futuro?

The underlying problem is the rigidity. As is the case now, elected officials would not have the authority to make major changes to defense spending. Further, the controversial budget floor is based on a level of spending that no democratic government has ever been able to change and, as he points out, also based on a period of time that corresponded with high copper prices.