Budget Cut makes it difficult to readjust 5%, and servers may be left without a salary increase

The cut made by the federal government in the Budget this Monday (30) may lead President Jair Bolsonaro (PL) to give up granting salary readjustments to all servers this year. After six months of comings and goings, the scenario without increases has gained strength again, according to government sources heard by the Sheet.​

To try to minimize the malaise with the civil service, the president is still considering the option of giving an increase of R$ 400 in food assistance to active servants in the Executive Branch. The measure can be financed with the reserve of R$ 1.7 billion that already exists in the Budget.

Technicians point out, however, that there is still no decision on this point, which depends on a definitive choice by Bolsonaro. The government has until July 4 to grant any readjustment, salary or benefits, without violating the LRF (Fiscal Responsibility Law), which prohibits increasing personnel expenses in the last 180 days of the mandate.

The change of direction in the discussions comes in the wake of the announcement of the need for a cut of R$ 8.2 billion in funding and investment expenses to accommodate the growth in other mandatory expenditures, such as court rulings and rural subsidies.

As the president ordered the shielding of the rapporteur’s amendments, used by Congress to irrigate its electoral strongholds with government funds, the scissors fell on the ministries, which must face a scenario of strong restrictions.

If Bolsonaro insisted on the readjustment, an additional block of BRL 5.3 billion would need to be made in the Budget. In other words, the total reduction in expenses would reach R$ 13.5 billion.

In recent days, the Chief Executive has been warned that ministries will be on edge with the R$8.2 billion cut. Areas such as education, health and science and technology must already undergo billionaire cuts to accommodate mandatory spending.

Further tightening the belt of these expenses could compromise relevant activities of the ministries, at a time when Bolsonaro seeks positive agendas to boost his image with an eye on the electoral race.

In a speech this Monday (30), the Chief Executive gave the password by emphasizing that he could not grant readjustments without having sufficient budgetary allocation for the measure.

“We are slaves of the law. We will not seek alternatives, subterfuge or incurring a crime of responsibility to serve anyone. We recognize the work of all servers, here the PRF [Polícia Rodoviária Federal]the PF [Polícia Federal] and many others, but at the moment the situation is quite complicated”, he said during a visit to Recife (PE), where the rains punish the population.

The PRF and the PF were among the police corporations that Bolsonaro wanted to contemplate with salary readjustments since last year, when the first battle was fought in Congress to provide some resource for budget readjustments.

The inclusion of the R$ 1.7 billion reserve, against the will of Minister Paulo Guedes’s team (Economy), was the trigger for the outbreak of mobilizations and even strikes by categories of civil servants, who demanded the same treatment.

The government was even warned by ministers of the STF (Supreme Federal Court) that the granting of differentiated increases only for police officers could raise questions and claims from other groups for equalization – with a chance of success.

Based on the complaints, the Economy presented Bolsonaro with alternative scenarios, such as the expansion of food aid – which has a lower cost as it benefits only active servants and is also more progressive, as it benefits groups with lower wages more proportionately.

Another option was to give a 5% linear adjustment for all categories, including military. This alternative won Bolsonaro’s preference, but would require an additional cut on the budget.

The president was willing to go ahead with the measure and had even been considering a differentiated increase for PRF and Depen (National Penitentiary Department), as a way of valuing categories that make up his electoral base. But the significant revision of mandatory expenses ended up jeopardizing these plans.

In addition to the impact of the scissor on public policies being very large, the political dividends of the adjustment would not be so expressive for Bolsonaro, since most categories have complained that the 5% adjustment is too little.