Bolsonaro edits decree to speed up the release of amendments on the eve of the election

President Jair Bolsonaro (PL) edited this Tuesday (6) a decree that will allow accelerating the release of rapporteur amendments, used as a bargaining chip in negotiations with the National Congress, less than a month from the elections.

According to government technicians interviewed by the Sheetthe maneuver will allow an immediate release of R$ 5.6 billion in the 2022 Budget. The decree was published in an extra edition of the Official Gazette of the Union.

A good part of the money will irrigate the amendments of allied congressmen on the eve of the election. Another portion should be used to alleviate the pressure on discretionary expenses of the Executive Branch, which include funding and investments.

The exact division of the amounts is being kept confidential by the technicians, given the sensitivity of the topic. In July, when almost half of the R$ 16.5 billion in amendments by the rapporteur was blocked, the president of the Chamber, Arthur Lira (PP-AL), who controls part of the funds, complained to Palácio do Planalto.

The decree allows the government to incorporate into budget execution, in advance, the effects of legal rules implemented after the most recent edition of the bimonthly report of revenues and expenses.

In practice, the Executive will be able to relocate the fiscal space created after Bolsonaro’s maneuver to cut funds from science and culture to unlock the Budget, a move revealed by the Sheet.

On August 29, the president edited two MPs (provisional measures), one of them to limit the spending of the FNDCT (National Fund for Scientific and Technological Development) in 2022 to R$ 5.6 billion.

Another MP postponed the transfers of the Paulo Gustavo and Aldir Blanc laws, to aid 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. in these sectors.

Without the decree, the budget rules forced the government to prepare a new budget evaluation report. The next edition is only scheduled for September 22nd — which would leave little time for the release of the amendments before the October 2nd election.

The Ministry of Economy can prepare extemporaneous reports whenever it deems necessary, but this task requires an effort from the entire Esplanada dos Ministérios to send updated information, including projections of inflation, growth, forecast of expenses with social security and assistance benefits, among others.

In this Tuesday’s decree, Bolsonaro dispenses with the preparation of the report whenever legal acts not considered in the previous document demand the “adoption of measures”, provided that the decision has been passed by the JEO (Budget Execution Board), a collegiate formed by ministers Paulo Guedes ( Economy) and Ciro Nogueira (Civil House).

According to reports, the decree was edited to “give the necessary comfort” to technicians in releasing these resources without the need for a new report. There was pressure from the top of Congress to unlock the funds soon.

“The measure makes it possible to lock and unlock the budget allocation provided for in the Budget Law of 2022, and its amendments, even before the bimonthly or extemporaneous calculation of all mandatory primary expenditures or other factors that affect the result that are subject to the limits of the spending ceiling”, says the General Secretariat of the Presidency of the Republic in a note.

On September 22, the next report will detail all the changes, but the effect of the release will have already been absorbed by the bodies and parliamentarians awarded the amendments.

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. In terms of value, around R$ 8 billion are amendments by the rapporteur.

According to government technicians, there is an expectation that the immediate release of part of these amendments will allow congressmen to commit the funds before the elections. Commitment is the first phase of expenditure, when the public administration establishes a commitment to contracting a particular good or service.

According to the understanding of the AGU (Advocacy-General of the Union), in the period before the elections, the government can adopt “preparatory acts” for the execution of the amendments, which includes the signing of agreements. In the interpretation of some technicians, the commitment of the expense is also a preparatory act, since there is no financial transfer.

Although Bolsonaro’s decree has the immediate effect of releasing funds, members of the economic team warn that the norm also allows the immediate incorporation of impacts in the opposite direction, that is, that force the government to cut expenses.

If Congress approves a measure that increases Executive spending, the Economy will be able, under the new rule, to immediately block funds to compensate for this increase in spending.