Bolsonaro’s Maneuver Allows Cut in Science and Culture to Unlock Budget

President Jair Bolsonaro (PL) published this Monday (29) two MPs (provisional measures) that, in practice, allow cutting funds in the areas of culture and science and technology, redirecting space in the Budget to accommodate other expenses, including amendments. parliamentarians.

The expectation within the government is that the two measures will pave the way for an unblocking of funds in the bimonthly evaluation of the Budget scheduled for September 22, on the eve of the election. They should also help to close the accounts of the budget proposal for 2023, to be sent next Wednesday (31).

The government currently has R$ 12.7 billion in blocked expenses to avoid an overflow of the spending ceiling, a fiscal rule that limits the advance of expenses to inflation. Taken together, the measures can contribute to reducing the 2022 block by around BRL 8 billion, depending on the dynamics of other budget items.

Although Bolsonaro and Congress have negotiated a PEC (proposed amendment to the Constitution) to institute an extract bill of R$41.25 billion to boost social benefits until the end of the year, other expenses, such as spending by ministries and parliamentary amendments, are still ongoing. must respect the spending limit.

Faced with the need for cuts, the government contradicted the National Congress and blocked almost half of the R$16.5 billion in rapporteur amendments, an instrument used as a bargaining chip in political negotiations. as showed the Sheetthe measure generated so much dissatisfaction that it was necessary to signal to the top of Congress the release of the money soon after the elections.

One of the MPs published by Bolsonaro, effective immediately, limits the amount to be applied by the FNDCT (National Fund for Scientific and Technological Development) in 2022 to R$ 5.6 billion. The measure, according to technicians heard by the report, should release approximately R$ 2 billion in resources.

For 2023, the MP signed by Bolsonaro, effective immediately, limits the amounts applied to 58% of the fund’s revenue forecast for the year. This percentage grows by 10 points each year until 2026, returning to 100% in 2027.

Before the MP, the government needed to reserve space in the Budget to cover expenses equivalent to the entire revenue forecast for the fund. There was still an article forbidding the contingency of funds – which was immediately revoked by Bolsonaro.

In July, the government had tried to pass a bill in Congress that would allow the fund’s spending to be blocked. The proposal was harshly criticized by industry associations and, after pressure, was rejected. Now, however, the issue must return to the agenda of the Legislature.

A second MP postponed the transfers of the Paulo Gustavo and Aldir Blanc laws, aiding culture in states and municipalities, and the Perse (Emergency Program for the Resumption of the Events Sector), approved by Congress as a response to the crisis caused by the Covid-19 pandemic. 19 in these sectors.

The proposals were even vetoed by Bolsonaro, but the vetoes were overturned by the National Congress, forcing the economic team to include their impacts in the Budget.

In 2022, expenditures would be BRL 3.86 billion with the Paulo Gustavo law and BRL 2.5 billion with Perse. In 2023, there would be a transfer of R$ 3 billion due to the Aldir Blanc law.

The incorporation of the amounts ended up putting pressure on the spending ceiling and contributed decisively to the expansion of the expenditure block announced on July 22, which ended up affecting the parliamentary amendments. It was also making it difficult to close the 2023 budget proposal, which should be sent with an even bigger reserve, of R$ 19 billion, for the budget of congressmen.

The MP edited by the president postpones the transfers of culture and the events sector for a year, throwing all expenses that should be executed in 2022 to 2023. The expenses scheduled for next year were postponed to 2024.

In addition, the values ​​provided for in the law, previously defined in an express and mandatory way, were made more flexible. The text now says that the Union is “authorized” to pass on the figures mentioned, which are presented as the “maximum global value”.

In practice, according to technicians, the wording makes room for the government to make payments smaller than those stipulated in the law, since they will act as a ceiling for transfers.

Government technicians believe that the projects approved in Congress could not create mandatory expenses, at the risk of harming the LRF (Fiscal Responsibility Law).

The president of the National Forum of State Culture Secretaries and Directors, Fabrício Noronha, criticized the measure and said that it changes the “essence” of the laws. “It was a little way that the federal government went ahead and a process that has already been debated. In a stroke of the pen, it weakens planning. Without mandatory appeal, this becomes a dispute year after year,” he said.