Defense asks for another R$ 1.3 billion as government plans new budget cut

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While the Palácio do Planalto sees the need for new blockages in this year’s Budget, the Ministry of Defense asks the Ministry of Economy for a supplement of R$ 1.3 billion for spending until December.

In 2022, the ministry has the fourth largest discretionary budget on the Esplanade, with R$ 11.1 billion – it is only behind Education, Health and the Economy.

The demand is made at a time when the government will be forced to tighten more expenses this year and is still suffering wear due to the submission of the 2023 Budget proposal with cuts in sensitive social areas, such as Farmácia Popular and Mais Médicos.

President Jair Bolsonaro (PL), a former member of the Armed Forces, is seeking reelection in less than two weeks. According to the most recent Datafolha, he has 33% of the voting intentions, against 45% for former president Luiz Inácio Lula da Silva (PT).

The request for extra Defense resources aims to complement the funding actions of the three Armed Forces (Army, Navy and Air Force), which internally allege financial difficulties to maintain basic military routine functions.

Government assistants are evaluating the possibility of meeting at least part of the request, although the full relocation to contemplate Defense is considered unlikely in the light of the situation.

Generals consulted by Sheet under reservation, they say that the budget of the Ministry of Defense maintained in the Jair Bolsonaro (PL) government the upward trend observed since the transition from the administration of Fernando Henrique Cardoso (PSDB) to Luiz Inácio Lula da Silva (PT).

This year, however, the need to block appropriations from the portfolio reached R$ 347.3 million in the third two months. In the opposite direction, the Forces report an increase in expenses with vehicle maintenance and other expenses, which strangled the accounts of the military commands.

In the Army, for example, regional commands face financial difficulties to buy tires for trucks. Therefore, military personnel need to rotate the wheels in conditions of use between vehicles weekly, to prevent them from having problems due to inactivity.

In the FAB (Brazilian Air Force), brigadiers told the Sheet that the increase in the prices of fuel and aircraft maintenance products consumed more than initially expected.

The Ministry of Defense and the three Armed Forces were contacted, but they did not comment on the request for a supplementary budget.

After the blockade in the third quarter, the Bolsonaro government even unlocked BRL 128 million from the Ministry of Defense accounts in early September. Part of the funds (R$ 20 million) was released in the form of the so-called RP9 – better known as rapporteur’s amendments, whose destination is defined by parliamentarians after a negotiation with Palácio do Planalto in exchange for political support.

Budget complementation was the subject of a meeting between ministers Paulo Sérgio Nogueira (Defense) and Paulo Guedes (Economy) last Thursday (15th).

According to military personnel close to the Defense Minister, requests for complementation occur every year, especially after the creation of the spending ceiling, a fiscal rule that limits the growth of expenses to the variation of inflation. The assessment is that the ceiling has been narrowing the ministries’ budget.

Members of the economic team and palace assistants met on the same day to discuss the need for a new block on public accounts, scheduled to be announced next Thursday (22).

Government technicians have not yet arrived at the exact value of the cut, which is still under discussion within the JEO (Budget Execution Board) — formed by ministers Guedes and Ciro Nogueira (Casa Civil). But they have already mapped a series of mandatory expenses whose growth has surprised and is putting pressure on other areas.

According to technicians heard by the Sheet, the main increase detected in expenses comes from the social security benefits account. The explanation is the reduction of the INSS (National Social Security Institute) waiting list.

If, on the one hand, the reduction of the queue is a relief for the insured, who only receive the amounts after the analysis of the benefit application by the body, the fulfillment of requests means an additional invoice for the government. Until now, the high wait ended up containing the expenses.

The queue peaked in July 2019, with 2.34 million applications under analysis, it gradually dropped with the implementation of a bonus per extra task for INSS servers, but rose again in early 2021 with the suspension of this bonus.

Since then, the stock of applications has remained stable at a level between 1.7 million and 1.8 million requests until the end of April this year, when the bonus was recreated. The queue dropped again in May and reached 1.46 million in July, the most recent data released by the government.

Internally, however, the technicians’ balance sheet shows a significant reduction of this order backlog to around 1.1 million at the end of August.

In addition, other mandatory expenses have grown and put pressure on the accounts. For example, the BPC (Benefício de Prestação Continuada, paid to the elderly and low-income people with disabilities) and unemployment insurance.

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