The PEC (proposed amendment to the Constitution) of the Precatório should release an increase of R$ 106.1 billion in federal government spending in 2022 and, even so, the resources are not enough to pay for the promises of President Jair Bolsonaro (no party ), which intends to run for re-election.
According to updated data released by the Ministry of Economy this Monday (22), the extra money should be used to pay mandatory expenses (such as retirement and pensions), the expansion of the Brazil Aid benefit and the extension of the payroll exemption (a measure that reduces taxes paid by companies on employee salaries) to 17 sectors.
According to the government’s accounts, only R$1.1 billion would be left. This amount, however, is not enough for Bolsonaro’s other promises, such as measures aimed at truck drivers, gas vouchers for the low-income population and salary increases for federal civil servants.
To get more money, the government and Congress will have to negotiate adjustments to the 2022 Budget. There is also pressure for an increase in resources reserved for parliamentary amendments, which are used by deputies and senators to send funds for projects and works in their electoral bases.
The adjustment must be made with a cut in discretionary expenses, which are not mandatory and finance the functioning of the public machine.
At the end of October, the government even announced that the PEC would allow an increase of R$ 91.6 billion next year. This projection was updated to R$106.1 billion because of expectations that inflation will accelerate further until December.
Raising the value of Auxílio Brasil, which replaces Bolsa Família, to the minimum level of R$400 per beneficiary should cost R$51.1 billion next year.
Mandatory expenses must consume R$ 48.6 billion in the budget space to be opened with the PEC.
The payroll exemption has an estimated cost of R$5.3 billion — an amount to be added to the 2022 Budget expenses.
The data were presented by the secretary of Treasury and Budget of the Ministry of Economy, Esteves Colnago, during a debate in the Senate on the PEC.
“The impression we have here at the Ministry of Economy is that this uncertainty regarding the payment of the social program and the ceiling on spending is creating a very great uncertainty for economic agents,” stated the secretary. He defended that the solution be approved soon by Congress to end this discussion and not allow for proposals such as a new calamity decree, which is rejected by the economic team.
“That’s why it’s so important that we make an amendment to the Constitution, an amendment that creates the structural space for this program. Because if not, next year, we actually run the risk of being on the eve of the election, on the eve of the first round, being led to re-discuss the Constitution, to re-discuss the spending ceiling, to re-discuss the conditions of a decree of calamity, in which it does not have the same difficulties of being modified from the Constitution”, declared Colnago.
The picture released by him does not include other measures promised by Bolsonaro.
According to technicians at the Chamber, around R$600 million should be used to pay the gas allowance, sanctioned by the president on Monday.
The beneficiary families will be entitled, every two months, to receive an amount corresponding to at least half the price of the 13 kg cylinder.
The “Gas allowance for Brazilians” law determines that families enrolled in the CadÚnico (Single Registry for Social Programs) with a monthly per capita family income less than or equal to half the minimum wage can be benefited.
For the so-called “diesel bag”, promised by Bolsonaro, the government will need another R$ 3.6 billion next year. Bolsonaro has already stated that he would launch a program of R$ 400 per month to around 750,000 truck drivers.
In the case of the readjustment for civil servants, the president did not declare what will be the salary correction index. But a 5% readjustment, as is being considered, would cost around R$ 15 billion.
For the parliamentary amendments, congressional leaders defended an increase of BRL 16 billion in these resources, but the most recent negotiations indicate that the value will reach, at most, BRL 7 billion.
“The demands are endless. I believe that during the process [do projeto de Orçamento de 2022], Congress will reduce discretionary spending by R$15 billion. This will worsen the quality of spending. [público]”, said economist Marcos Mendes, columnist for sheet and one of the creators of the fiscal rule.
For him, the PEC dismantles the spending ceiling. “Every time you need to spend more, they’ll pass a PEC to spend more.”
According to Mendes’ calculations, the effect of the PEC of precatório may reach R$ 113 billion in the increase in expenses in 2022. He considers an inflation estimate of 10%. The index used by the government in the most recent account is 9.7%.
Also on Monday, the president of the Senate, Rodrigo Pacheco (PSD-MG), said that the PEC dos Precatório “hardly” will be voted on this week by the plenary of the Senate. However, he stated that he will seek to guide it in the plenary until the end of next week.
The president of the Senate also said that there are “interesting” and “smart” amendments being presented to the original text, which will be evaluated by the rapporteur, Fernando Bezerra (MDB-PE). In particular, he commented on the amendments by the MDB leader, senator Eduardo Braga (MDB-AM), which make the Auxílio Brasil program permanent and create a commission to audit the court orders.
Pacheco, a pre-candidate for the Presidency of the Republic, also stated that the country needs to find a way to finance Auxílio Brasil, if it becomes permanent.
“If there is one thing in Brazil that wealth should serve, it is to make a decent social program for people. So I believe that we can indeed have the sources of resources necessary for the social program to be implemented, for a greater number of families , which are really in need, and also with a value that gives people a purchasing power,” he said.
“So this amount of R$ 400, I’ve been saying that it’s not our value, it shows itself, it’s a reality of people who need to buy rice, beans, pay for cooking gas and need to have the money for it,” added the senator .
For the CCJ vote, the government leader has shown confidence and is even considering putting the proposal approved by the Chamber of Deputies to vote, with a few adjustments. The biggest changes and eventual slicing would be made for the vote in the plenary of the House — where it needs to be approved in two rounds, with the votes of 49 of the 81 senators.
The Precatório PEC reaches a decisive week, with the prospect of voting in the Constitution and Justice Commission. Bezerra has told interlocutors that he will conclude his text this Tuesday, after meeting leaders from some of the main benches. Parties with more senators, such as MDB and PSD, plan meetings to decide their position.
Bezerra has already passed on to some senators his proposal for slicing the PEC dos Precatório, a way to facilitate approval. In this case, only the points that would guarantee the payment of Auxílio Brasil of R$400 in December and the points on which there is consensus among the senators would be voted. Changes to the text that has already passed through the Chamber would be placed in another PEC, which would continue for analysis by the deputies.
The pillars of measures to increase expenditures in 2022 would already be enacted shortly after the Senate vote, which would pave the way for Bolsonaro to fulfill his promise to pay the R$ 400 of Auxílio Brasil next month. Sources in the Senate also point out that the text that will be approved in the House should contain the points of consensus among the senators, even if this means a return to the Chamber.
Four changes to the PEC have gained support from the main benches of the Senate: the value of R$ 400 of Auxílio Brasil should become permanent (and not until December 2022); guarantee of the funds to be released with the PEC for the social program and mandatory expenses (and not for the readjustment of civil servants), the possibility of creating an audit to investigate the evolution of court orders and a mechanism that provides predictability for the payment of court orders to States.
It is still discussed what would be the bureaucratic procedures to avoid delays in promulgating the proposal. One of the issues studied is the rapid promulgation of the common part of the text, approved both in the Chamber and in the Senate, leaving it to deputies later to analyze the changes made by the senators.
Making the value of R$ 400 of Auxílio Brasil as a permanent measure and auditing court orders are suggestions by the leader of the MDB in the Senate. The transformation into a permanent program gained the support of practically all the benches and has the government’s approval.
However, the government is still looking for a solution to enable the permanent increase in Brazil Aid to R$ 400. This is because, according to fiscal rules, permanent measures need to be compensated in some way, such as an increase in tax collection.
The economic team insists that the way out, therefore, is the approval of the tax reform that is stuck in the Senate. The project creates taxation on profits and dividends — which would serve as compensation for the increase in expenses with the social program.
The plan, however, is resisted by the Senate, which blocked the tax reform bill since September.
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