December 8, 2018 / 2:47 AM / in 3 days

Mexico's top court suspends public sector pay cuts law

MEXICO CITY (Reuters) - Mexico’s Supreme Court on Friday suspended a new law that cuts public sector pay, freezing it until the tribunal has made a definitive ruling on the legislation, and dealing a blow to Mexican president Andres Manuel Lopez Obrador.

Promulgated in November, the law stipulates that no public servant can earn more than the president.

Vowing to fight corruption and reduce inequality, Lopez Obrador has vowed to push through a raft of austerity measures. He has cut his own salary to 40 percent of what his predecessor earned, to 108,000 pesos ($5,331.36) per month.

However, opposition senators filed a challenge against the pay cut law, saying it violated the rights of public servants.

In granting the suspension, the court said in a statement the law could not be applied until a definitive ruling had been made. That complicates the government’s first budget under Lopez Obrador, a veteran leftist who took office on Saturday.

The 2019 budget is due to be presented on Dec. 15, meaning the government may have to revise its spending plans.

Mario Delgado, lower house leader of Lopez Obrador’s National Regeneration Movement (MORENA), blamed the opposition for trying to protect what he called the “gilded bureaucracy” and said his party had a right to set pay levels in the budget.

“We will put the cap on the president’s salary, and go downward from there for everyone,” he told Mexican radio.

The dispute could fuel tensions between Congress and the Supreme Court, which some supporters of the law accuse of having a vested interest in protecting its members’ salaries.

Lopez Obrador won office by a landslide in July, helping to propel MORENA and its coalition allies to the first outright majority in both houses of Congress in Mexico since 1997.

After the court’s decision, Lopez Obrador told a crowd in the western state of Nayarit, where he was pledging aid for victims of a recent hurricane, that the days of having a “rich government with a poor population” had to end.

“The guys on top have a great life,” he said. “Now they’re angry because they were earning 600,000 pesos a month. And that’s all over.”

Reporting by Dave Graham and Noe Torres; Editing by Diane Craft & Simon Cameron-Moore

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