Opinion – Marcos Mendes: Public spending, ceilings and floors

There is debate over what to do with the shabby spending cap in the next administration. The Ministry of Economy talks about a more flexible rule than the current one, which allows real increases in spending whenever public debt is low. There are those who speak of a temporary suspension, to give time to design a new rule.

It is a valid attempt to avoid the worst, which would be the pure and simple repeal, with the return to the tax regime before the ceiling, of real growth in spending of 6% per year. The problem, however, is deeper. No rule, however ingenious, will resist the political incentives created in recent years.

Public spending stems from political decisions. Fiscal rules, such as the ceiling, only work when a majority of political forces recognize the benefits of fiscal balance for society and decide to limit the usual pressures on the Budget.

Soon after Dilma’s impeachment, in the midst of one of the biggest recessions in history, accompanied by lack of fiscal control, this majority was formed, faced with the fear of the continuation of the recessive spiral, which allowed the approval of the ceiling.

The majority in favor of fiscal balance would need to have been held long enough for fiscal reforms to be passed. Reducing the rigidity and inertia of spending growth would enable compliance with the ceiling. That’s not what happened. Most dissolved.

A model was created in recent years in which the Legislature gained power to spend more without bearing the consequences of its actions, such as inflation and high interest rates, whose wear and tear is on the Executive’s account. Power without responsibility does not lead to good results.

The musculature of the Legislature is not only displayed in the steroids of mandatory and rapporteur amendments or in billionaire party and campaign funding. It is also in the ease with which it rejects provisional measures, overturns vetoes, approves legislative decrees annulling administrative decisions of the Executive.

It also appears in the lack of ceremony with which its leaders trample the internal rules of the Senate and the Chamber of Deputies, voting on anything by cell phone, dispensing with the analysis of committees, changing rules at the time of voting. They fix the voting agenda without negotiating with the Executive. They approve new mandatory expenditures and only then discuss whether there is room in the Budget. They extend their powers over the management of the Budget to each Budget Guidelines Law.

The process was catalyzed, in recent months, by the reelection effort of the President of the Republic, who became a partner and stimulated the MMA in the Legislature. Money is approved at the touch of a button for high electoral impact programs and the distribution of money to those who scream the loudest.

Recent decisions have already given a cone of the Budget to: community health agents, nurses, truck drivers, taxi drivers, people with disabilities, mill owners, cultural producers, hotels, churches, private universities, ports, collective transport and cargo companies, gas pipeline producers , owners of small hydroelectric plants, large and small companies in debt to the tax authorities, military personnel, micro-entrepreneurs, small companies, communication companies, civil construction, call centers. In industry, the sectors of footwear, textiles, clothing and clothing, leather, machinery and equipment, information and communication technology, integrated circuits and semiconductors won.

Nothing indicates that the list stops there. There are, for example, 88 projects in progress proposing the establishment or increase of salary floors for more than 30 professions, with an impact on the expenses of the three levels of government. It has everything: tutelary counselors, municipal guards, public accountants, doctors. If it was given to nurses, teachers and health agents, why not to others?

With such a deteriorated political economy, the most a spending ceiling can hope for is to hold back the short-term exaggerations a little, inevitably being breached from time to time. It doesn’t matter how ingenious and flexible your design is.