Mexico’s High Court to Hear Appeal From Fox

MEXICO CITY — Setting the stage for a constitutional showdown, the Mexican Supreme Court agreed Wednesday to hear President Vicente Fox’s complaint that Congress had usurped his budgetary powers by canceling billions of dollars worth of spending programs.

In a statement, the court also said it would suspend about $400 million in reallocations made by Congress that Fox alleged were illegal. Congress has a month to answer Fox’s charges, and the court’s decision may take months after that.

Interior Minister Santiago Creel said at a Wednesday news conference that the decision was a victory for Fox because the court had “accepted the president’s argument that this matter be thoroughly reviewed.”

In a November challenge to the chief executive, the opposition Institutional Revolutionary Party, commonly known as PRI, and the Democratic Revolution Party, or PRD, combined to pass a budget that reallocated about $7.8 billion of Fox’s proposed $158 billion in spending programs, most of which are fixed costs and entitlements. Fox’s National Action Party is a minority in Congress.

Although the reallocations amounted to a relatively small portion of overall spending, they represented one-third of Fox’s discretionary spending -- the funds above and beyond the fixed expenditures.

If they take effect, the reallocations would mean severe cuts in various departments, including the Interior Ministry, the armed forces and Fox’s poverty eradication program. Congressional proponents say it will boost education spending and salaries, and distribute more revenue to locally run social programs.

Although Mexico’s budgetary process has been contentious since the PRI lost its congressional majority in 1997, this year’s fight has been the most bitter, partly because of an April law that gave the lower Chamber of Deputies more power to modify the president’s spending plan.

From the start, that law had the potential to cause a constitutional crisis, said Jonathan Heath, head of research and chief economist at HSBC in Mexico, because the president has the right under the constitution to propose and maintain a consistent spending plan during his six years in office.

“The court will decide how much and what kind of modifying is correct and isn’t correct, and future budget negotiations can proceed accordingly,” Heath said.