Opinion: You can’t ride 2022 precatory and Congress tries to push the ball to STF

The PEC 23, which postpones the payment of court orders and substantially alters the financial rules in the Constitution, is under discussion in Congress.

In this case, the central problem is not a lack of money, but making the value of the court orders foreseen for payment in 2022 to remain within the expenditure ceiling created by Constitutional Amendment 95/16, during the Temer government, to remain in effect for 20 years.

Congress is failing to do the right thing. All proposals considered valid in the debates involve defaulting on the public debt, represented by precatories – both in the text approved by the Chamber of Deputies, and in the one discussed in the Senate. This is the misconduct of the matter.

In order to fully understand the problem, all the smoke that obscures the vision must be removed.

There are three intertwined financial issues, fighting to be under one roof. One is to maintain the rapporteur’s amendments, which sustain the relationship between the Executive and the Legislature. Another is to create a source of funds to pay the Auxílio Brasil of R$ 400 per month. And the third are the court orders already issued for payment in 2022, in the amount of R$ 89 billion.

Keeping the rapporteur’s amendments is the real priority, as they support the “take there and give here” relationship between Congress and the Executive, through the non-equal management of public resources. This is the focus of the debate. It is to include as much resources as possible for these amendments that all this financial mess is being made.

The source of funds to pay the Auxílio Brasil is the rhetorical argument, as the money exists and the expense is fair. The problem is that, in order to be under the spending ceiling, another expense will have to come out – and, obviously, they cannot be the rapporteur’s amendments, which constitute the main political priority, which is sought to be hidden.

It so happens that, constitutionally, there is no way to cycle the BRL 89 billion in court orders that have already been issued to be paid in 2022. Creditors have a vested right to receive them in the form and within the deadlines determined at the time of their issuance. Therefore, all this effort to give a bicycle in the 2022 court orders will fall to the ground in the STF, which has peaceful jurisprudence in this regard. Everything indicates that Congress wants to pass the problem on to the STF to decide, which, equally, is not correct and will generate political and economic noise.

With the smoke screen over the problem removed, what does it mean to do the right thing? Recognize that court orders are public debt, constituted through bonds (payment orders) issued by the Judiciary Branch, equal to the thousands issued daily by the Executive. With that, they leave the spending ceiling, like all public debt, which is not under it. Following this path will allow the credibility of the Brazilian public debt payment system not to be broken.

Whether or not re-election spending will be kept under the cap is another problem, which has no direct correlation with the above-mentioned solution.

Following the path being followed by Congress will generate the following doubt in the market: since the government is pedaling the court orders, which are judicial debts, why not pedal the other debts, represented by government bonds such as LTNs (National Treasury Bills) and the like? Credibility is not bought, it is conquered.