Pallade Veneta - Fires, teargas as Argentine police clash with protesters

Two cars were set alight by the angry protesters as the demonstration turned violent while Argentine lawmakers debated a swath of liberalizing reforms proposed by budget-slashing President Javier Milei.

Scuffles first broke out when protesters tried to bypass a system of fences set up between them and Congress, with demonstrators lobbing stones at officers who pepper sprayed them.

Observers and opposition MPs said dozens of demonstrators and a handful of lawmakers received medical attention.

Later, as night fell, thick blocks of shield-bearing officers and others on motorbikes pushed back the protesters, who overturned and set alight two cars -- one of which belonged to a local media organization.

At least five opposition lawmakers in the crowd were "hospitalized," legislator Cecilia Moreau told AFP.

At least 40 people were treated at the scene after being pepper sprayed, the Association Against Institutional Violence, a non-governmental organization, told AFP.

Moreau denounced police "repression."

Inside Congress, senators debated what remains of Milei's flagship "omnibus" reform bill -- rejected in its original form and approved with major changes by the lower house Chamber of Deputies in April.

- 'Back 100 years' -

The whittled-down bill has 238 articles -- slimmed from an initial 600-plus.

The measures include declaring a one-year state of economic emergency, allowing Milei to disband state agencies, and privatizing about a dozen public companies including state-owned carrier Aerolineas Argentina.

Others deal with reducing access to minimum retirement allowances and weakening labor protections by allowing for longer probation periods -- slammed by the left-wing opposition as a license to fire workers.

The provisions also envision tax, customs and foreign exchange incentives to encourage investment in the economic crisis-wracked country.

On the Senate floor, opposition lawmakers claimed the bill would set progress back by decades.

The labor reforms, in particular, "take us back to the last century when the employee had no labor rights," said opposition senator Mariano Recalde.

The bill is opposed by social organizations, leftist political parties, retirees, teachers and labor unions.

"We cannot believe that in Argentina we are discussing a law that will put us back 100 years," said Fabio Nunez, a 55-year-old lawyer among the protesters.

If approved, in discussions set to continue until the early hours of Thursday, the law will return to the lower house for a final green light.

- Milei's minority -

Milei's party is in a minority in both houses of Congress, which he has described as a "nest of rats," and the president has not had any legislation passed since taking office last December.

The self-declared "anarcho-capitalist" won elections last November vowing to take a chainsaw to public spending and reduce the budget deficit to zero.

By decree, he has cut the cabinet in half, slashed 50,000 public jobs, suspended new public works contracts and ripped away fuel and transport subsidies even as wage-earners lost a fifth of their purchasing power and annual inflation approached 300 percent.

Economy Minister Luis Caputo insisted Tuesday that the "omnibus" bill is "an accelerator, an enabler of economic recovery."

The debate is taking place with the economy mired in recession, amid a slump in construction, manufacturing and consumption.

If the legislative package is rejected, Milei will have to wait another year to propose a new one.

F.M.Ferrentino--PV