Government proposes six amendments to the PEC dos Precatório; understand

The government sent a new version of the PEC (proposed amendment to the Constitution) of the Precatório to the main benches of the Senate, containing six alterations in relation to the text approved in the Chamber of Deputies. In one of them, there is a loophole so that the R$ 400 value of Auxílio Brasil becomes permanent and does not need a source of income.

In order to approve the PEC in the Senate, the government has already signaled that it will make it possible to increase Brazil Aid to the minimum level of R$ 400 on a permanent basis, and not until December 2022, as previously promised. However, the plan ran into the need to comply with the LRF (Fiscal Responsibility Law), which obliges the Executive to present compensation in case of creation of a permanent expense.​

Faced with the impasse, the government is studying proposing a change in the PEC so that the social program does not need compensation (new source of income or cuts in expenses). The loophole, according to the leader of the government in the Senate and rapporteur of the proposal, Fernando Bezerra (MDB-PE), allows Brazil Aid to be paid in 2022 without a compensatory measure.

If there is any doubt that compensation will be necessary in 2023, the government would have time to approve, for example, the reform of the IR (income tax), which creates taxation on profits and dividends. This measure is defended by the economic team as a way of compensating the increase in Auxílio Brasil to R$400.

In the assessment of economists and congressional technicians, the gap in assessment by the government would represent a way of circumventing the LRF. Bezerra claims that, as the proposal amends the Constitution, the measure of turning the social program into a permanent policy has different treatment.

“The interpretation is that, as it is a constitutional amendment, this requirement would be met at the start of the program for you to finance Auxílio Brasil,” stated Bezerra.

Also included was the idea of ​​a device so that precatory orders paid to teachers, within the scope of Fundef (Fund for the Maintenance and Development of Elementary Education and the Valorization of Teaching), will be made as salary allowances. This prevents the amounts from being considered for the retirement of teachers, which seeks to preserve the public accounts of states and municipalities.

The move takes place on the eve of the vote of the PEC in the CCJ (Committee on Constitution and Justice), scheduled for this Wednesday (24). The government trusts an easier approval in the commission, where it needs only the support of the majority of the collegiate. However, interlocutors at the Palácio do Planalto are negotiating with Senate leaders for changes to the text that may guarantee a margin for voting in the plenary — which requires 49 votes from 81 senators, in two rounds.

According to Bezerra, the report should only be voted on this Thursday (25) or, at the latest, on Tuesday (30). The agenda for the CCJ session this Wednesday (24) already provides for the analysis of the PEC dos Precatório, but the PSD has already announced that it will ask for a view. The government leader is seeking to negotiate for a 24-hour viewing period only, but other senators are seeking an even longer period.

The PSD, the second largest bench in the Senate, will again meet with Bezerra before deciding on a position on the proposal.

“We are going to call the rapporteur of the matter, senator Fernando Bezerra for a meeting, but all the PSD senators are in favor of seeking a fiscal mechanism to be able to serve the most needy with permanent Brazil Aid. We also agree with the exemption from the payroll. of 17 sectors”, he informed, through a note.

Among the changes under negotiation is the forecast to make the value of R$ 400 of Auxílio Brasil permanent (and not until December 2022); and the guarantee that the funds to be released with the PEC will be used for the social program and obligatory expenses (and not for the adjustment of civil servants). The government also signaled the possibility of creating an audit to investigate the evolution of court orders in recent years and a mechanism that provides predictability for the payment of court orders to the states.

The government also responded to a request by governors and mayors, including the provision referring to Fundef precatório. These would be paid to teachers as a salary bonus. That is why there is a request from many senators, serving states and municipalities, that this payment is not made through salaries.

Precatório are debts of the Union already recognized in court. Therefore, there is no more appeal.

In the case of court orders linked to Fundef, Congress has already approved a law that allows the payment of these resources as an allowance. But there are still doubts about the legal certainty of this.

Even after the law, the CNM (National Confederation of Municipalities) sent a warning to mayors that “there is settled jurisprudence in the Federal Court of Accounts in the sense that resources from Fundef precatories cannot be used in apportionment payments, indemnity allowances, labor/social security liabilities and ordinary remuneration of education professionals”.

With the change being negotiated in the text of the PEC, the government hopes to increase the support of the Senate and of governors and mayors at the time of voting on the proposal.

Palácio do Planalto has already endorsed another change in the PEC: the change so that the amount of BRL 400 in Auxílio Brasil is permanent, but the economic team is still looking for a way to offset the increase in expenses, with, for example, the increased income (income tax reform), or cut spending (such as subsidies).

The idea of ​​making the R$ 400 permanent was presented by the leader of the MDB, Eduardo Braga (MDB-AM), and has been a consensus among practically all senators.

The PEC dos Precatórios became the main instrument of the government to pay for the Auxílio Brasil of R$ 400 as of December.

The PEC must release an increase of R$ 106.1 billion in federal government spending in 2022 and, even so, the resources are not enough to cover the promises of President Jair Bolsonaro (no party), who intends to run for reelection. The Chief Executive even defended using the open space in the budget to grant salary readjustments to all employees, “without exception”. Parliamentarians, even close to the government, reject the initiative.

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.

Initially, the PEC faces resistance among senators, who refuse to open a large space in the budget for the government in an election year. Therefore, alternative proposals were presented and the government’s leadership even negotiated for the construction of a consensus proposal.

With the failure, Fernando Bezerra then invested in negotiations with the main benches, yielding in some points, but keeping the main structure of the proposal, especially the space that will be opened in the budget.

The government is running out of time to approve the PEC in time for the R$ 400 Brazilian Aid to be paid in December. The forecast is that the proposal is voted in the CCJ of the Senate this Wednesday and in the plenary of the House next week. The government’s leadership says that, even with the changes, which will result in the text being returned to the Chamber of Deputies, the government believes that it will be possible to swiftly enact the measure.

The six amendments to the PEC under discussion in the Senate:

1) Make the value of BRL 400 of Auxílio Brasil permanent and free the government from financial compensation

2) Allow the payment of Fundef court orders as salary bonuses

3) Link the expenses to be released by the PEC to exclusive expenses with Auxílio Brasil, mandatory government payments (retirements) and payroll exemption

4) Audit of the increase in the volume of court orders

5) Calendar of payment of Fundef court orders to the states throughout the year

6) Precatory spending forecast for next year as early as April of the previous year

+ wording adjustments to clarify the possibility of using third-party acquired rights (item that appears in the text approved by the Chamber, but which would not need further analysis as it is only a textual adjustment)