Milei's reform project, the so-called "Omnibus Law", goes back to square one in Congress.
The government decided to send it back for committee analysis due to a lack of support on some points.
Although the initiative had been approved in general last Friday, it sank when articles were debated in particular.
The so-called "pro-dialogue" opposition asked for more changes in the special powers for the Executive that the draft contemplated.
There was also no deal on the revenue of tax on consumption in dollars that several provinces demanded to share.
But the government decided to withdraw the bill from the floor before dealing the privatization of public companies, due to the lack of support it anticipated.
Now, the "Law of Bases and Points of Departure for the Freedom of the Argentines" will have to be discussed again in commissions, as established by Parliamentary protocol.
Thus, last week's general approval is left without effect.
The Omnibus Law originally contained more than 600 articles with wide-ranging reforms in tax, legal, labor, health, energy and administrative matters, among other areas.
Milei's government demands this tool to deregulate the economy, generate private investment and employment, curb an inflation rate of 150% per year and fight poverty.
For weeks, the Casa Rosada agreed on changes with part of the opposition and removed almost half of the articles from the text.
But the modifications were not enough and now the proposal will be discussed again from scratch.
After yesterday's session, President Milei criticized the legislators who did not support the initiative.
From Israel, he stated in X: "Our government program was voted by 56% of Argentines".
And expressed: "we are not willing to negotiate with those who destroyed the country".
The government warned that Mr Milei could call for a referendum to obtain support for his reforms.
Meanwhile, Peronist coalition Unión por la Patria celebrated the reversal of the Ley Bases, which they firmly opposed like most of the unions and left-wing parties.
