By Andrew Cawthorne and Brian Ellsworth
CARACAS (Reuters) - Venezuela's parliament looked set on Tuesday to grant President Nicolas Maduro year-long decree powers he says are needed to regulate the economy and stamp out corruption but adversaries view as a thinly veiled power grab.
The National Assembly was expected to give final approval to the controversial Enabling Law at its afternoon session after Maduro garnered the two-thirds, or 99 votes, needed during a preliminary debate last week.
Though winning the powers would hand him a political victory in the run-up to December 8 municipal elections, he still faces a severely distorted economy with embarrassing product shortages and inflation surging to nearly 55 percent.
"Down with prices, down with speculators, down with conspiracies!" Maduro told cheering supporters in a speech late on Monday, explaining his plans to confound the "bourgeoisie" in the same anti-capitalist rhetoric as his predecessor.
Maduro, 50, who is staking his rule on preserving the late Hugo Chavez's socialist legacy, says he has already planned the first two laws he would decree - maybe as soon as Wednesday.
One is intended to limit businesses' profit margins to 15-30 percent as part of a state "economic offensive" against price-gouging. Another would create a new state body to oversee dollar sales by Venezuela's currency-control regime.
A small group of opposition demonstrators was arrested on Monday after chaining themselves to the gates of the legislature to protest the Enabling Law. Government supporters were planning to rally outside Congress during Tuesday's debate.
Maduro's original justification for the decree powers was to widen a crackdown on corruption, drawing skepticism from critics who say he zealously targets opposition officials while turning a blind eye to the worst of state-linked graft.
High-profile targets of Maduro's "war on corruption" have included an opposition advisor accused of running a transvestite prostitution ring and an opposition legislator stripped of parliamentary immunity for allegedly mismanaging a state-owned stadium.
But the crusade also toppled a high-profile Socialist Party mayor, executives from a China-financed state investment fund and the former head of a state-run iron mining firm.
Opponents say Maduro should be chasing military generals and other senior officials they blame for turning Venezuela into a major supply route for Colombian drugs. The government denies that, saying narcotics seizures are on the rise.
BLACK BOX ACCOUNTING
Critics also note Venezuela has for years refused to publish details of how it spends money held in state-run funds created in the Chavez era even though required to by the country's main anti-corruption law, calling into question why he would need special anti-graft powers.
Parallel expenditures that do not require legislators' approval have grown so large that investors, such as those who hold Venezuelan bonds, struggle to quantify state spending and have to make their own calculations of the budget deficit.
Government ministries have not responded to repeated requests over the last year seeking details of spending via off-budget mechanisms that include a fund called Fonden, which has received more than $100 billion.
Maduro in the past two weeks has sent troops to occupy an electronics retailer and ordered thousands of businesses to slash prices, winning praise from supporters. Business groups say that risks worsening shortages in the months to come.
"You can't beat inflation by decrees but with sensible economic policies," the opposition Democratic Unity coalition said in a statement, blaming failed statist policies for economic problems and calling the Enabling Law a smokescreen.
Prior to his crackdown on prices, several polls had shown a rise to about two-thirds in the number of Venezuelans pessimistic about the state of the nation. Maduro's approval rating has dropped from about 50 percent to the low 40s, two polls showed.
(Additional reporting by Deisy Buitrago; Editing by Will Dunham)