After an agreement reached the night before for the slicing of the proposal, the National Congress enacted on Wednesday (8) the PEC (Proposal for Amendment to the Constitution) of the Precatório, a government bet to be able to pay emergency aid of at least R$ 400 to 17 million families by December 2022.
The stretch to be promulgated, however, guarantees only part of the space needed in the Budget to meet the extra expenses planned for next year, including the new social program.
The promulgated common parts open a slack of R$ 62.2 billion next year. Another R$48.6 billion will still depend on the vote of another PEC in the Chamber and Senate.
The enactment session was marked by a series of protests by the senators, who pointed to the breach of the agreement during the vote in the Senate. Parliamentarians questioned the enactment of two articles, without the changes made by the senators, which remove the linkage of spending by the federal government. Thus, they allege that the PEC could open a loophole for the government to freely spend the resources.
The PEC dos Precatório that was approved by the Chamber changed the rule for calculating the expenditure ceiling, which limits the advance of expenses to inflation, and set a limit for the payment of judicial debts of the Union, against which there is no longer any appeal .
The text underwent changes in the Senate, which made a new vote by deputies necessary.
On Tuesday (7), the presidents of the Chamber, Arthur Lira (PP-AL), and of the Senate, Rodrigo Pacheco (PSD-MG), announced an agreement to enact the part of the PEC that remained unchanged. This would include changing the spending ceiling, but not the limit for paying court debts.
The agreement foresees that the proposal that will create the sub-ceiling for the precatório, as the judicial debts are called, must be analyzed again by the Chamber next Tuesday (14). Afterwards, the text will need to go through the Senate again.
Therefore, only one of the two pillars of the PEC has been promulgated. The change in the ceiling calculation will take effect immediately. But, in order to prevent a strong expansion of expenses, a limit on the effect of this measure was determined now (in December).
The promulgated text establishes that expenditures in 2021 could rise by R$ 15 billion, to be used in vaccines, in the health and social areas.
Another promulgated point provides for the installment payment of debts that municipalities have with the Union.
To conclude the analysis of the PEC, the government needs to approve in the Chamber the measure that creates a limit for the discharge of court orders, in addition to the section determining that the effect of the PEC in the Budget is only used to cover mandatory expenses (which increased in view of the high inflation ), from Auxílio Brasil and the exemption from the payroll.
The economic team has the space of R$ 106.1 billion to be able to accommodate all the expenses foreseen for 2022.
To ensure the expansion of Auxílio Brasil, the government needs an additional R$ 51.1 billion.
Another R$ 48.6 billion will be allocated to the correction of social benefits for inflation, the expansion of the spending ceiling of other powers (due to the change in the rule) and the adjustment to the constitutional minimums for health and education.
There is also an extra bill of R$5.3 billion to pay for the extension of the payroll exemption for companies, a measure already agreed upon between the government and the National Congress.
The partial enactment of the PEC, just with the change in the spending ceiling, in theory makes the expansion of R$ 51.1 billion intended in the Auxílio Brasil feasible, according to a member of the economic team.
However, as the BRL 62.2 billion is insufficient to cover all programmed expenditures, the need to also revise mandatory expenditures could impose a drastic cut in discretionary expenditures, which include funding and public investments.
According to the leaf, the government is going to send an official letter to the general rapporteur of the 2022 Budget, Deputy Hugo Leal (PSD-RJ), precisely to emphasize the need to review mandatory expenditures, but it is still evaluating whether it will do this before or after the vote on the second PEC .
The technicians claim, however, that the final composition will depend on the rapporteur himself, since the official letters do not have the power to change the budget proposal, as would occur with the sending of a modifying message.
The deadline for sending an amending message ended on Tuesday (7) with the vote on the preliminary report on the 2022 Budget, limiting the government’s instruments to amend the proposal.
The vote on the second PEC, complementing the fiscal space for next year, would also contribute to making the scenario more comfortable to accommodate expenses.
The session was marked by protests from some senators, who did not agree with the text that would be promulgated. Senator Simone Tebet (MDB-MS), who launched her candidacy for the presidency of the Republic on the same date, said that there was a breach of the agreement signed during the vote on the matter in the Senate. He stated that the enacted text did not contain the ties that prevent the government from freely spending the resources. The parliamentarian added that the agreement provided for the linking of expenditures with the social program and social security actions.
“We are going to enact the fiscal space of almost R$60 billion, as a result of the temporal change to December in the calculation, this fiscal space is free, it will remain there in an article depending on a vote by the Chamber of Deputies,” stated the congressman.
“Look: I’m not dealing with the Chamber; I’m dealing with an agreement that was made here so that we could cast the necessary votes, which the government did not have, to be able to accept progress on this issue,” he added.
She asked to delete these two articles.
Senator Alessandro Vieira (Cidadania-SE) stated that it would be legal to promulgate the part of consensus between the two Houses. However, he pointed out that the editorial adjustments made to adapt the final text resulted in changes of merit.
“What does not fit in a post-approval wording adjustment is to change the content approved by the Senate,” he stated.
Then, there was a strong discussion between Simone Tebet and Rodrigo Pacheco, also a pre-candidate for the presidency of the Republic.
“I am very sorry that Your Excellency has not honored the commitment made to the leaders of this House. We, under your approval, guarantee the votes for the President of the Republic and the government, in the commitment guaranteed by Your Excellency, which would not slice”, said the senator.
Pacheco later replied that he had not reached any agreement with the senator and raised the hypothesis that Tebet’s demonstration had an electoral nature.
“I am not aware of your allegation of non-compliance with the agreement,” he said.
“It’s not possible for us to stay in political discussion all the time with a who-knows-what stamp, including electoral ones, in order to demoralize the senator of that House. I’m not going to further polemic”, he added.
Because of the discussion in the plenary, when many questioned the possibility of federal deputies ignoring the senators’ changes, the Speaker of the Chamber Arthur Lira refused to give the speech he had scheduled. Lira was also present accompanying the session.
“President Rodrigo Pacheco, I would like to ask your permission. I am not going to read my speech, which was ready, which is on the table, because I think it has been disconnected with the moment we live in the plenary of the Federal Senate, with a thousand apologies,” he said and then added that he will put on the agenda next Tuesday the vote on the appended PEC, as he had undertaken.
After the session, the government leader, Fernando Bezerra (MDB-PE), stated that there is a signal from the deputies that two items changed by the senators will be accepted. One of them is the transformation of Auxílio Brasil into a permanent program. The other point is binding, an item that has become essential for senators and a reason for discussion.
On the other hand, Bezerra stated that there is resistance from some deputies in relation to the scaling of the payment of Fundef – education fund – predicting percentages of debts that will be paid year by year. Lawmakers argue that it would be more appropriate to open up room for maneuver for the Treasury to pay these debts according to the circumstances.
However, this referral has already been approved by the Chamber of Deputies.
Understand the main points promulgated
1) Change in the spending ceiling index
What is the ceiling:
Constitutional rule passed in 2016 that limits the increase of most federal expenditures to the inflation of the previous year
How is it today:
the ceiling is corrected by the inflation measured by the IPCA in 12 months until June of the previous year
How stays:
the amount is recalculated, retroactively, based on the IPCA from January to December; in practice, it widens the roof.
2) Refills to municipalities
What does the PEC say:
possibility of municipalities paying debts to the Union in installments if they approve local Social Security reforms
Conditions:
Municipalities will have to demonstrate specific changes in social security rules. One is that municipal employees will not be able to pay lower rates than federal employees
What still needs to be voted on in the House and Senate
1) Ceiling for payment of court orders
What is precatory:
debts of the Union already recognized by the courts and without the possibility of appeal
How is it today:
precatory inscribed in the Budget are paid
How it looks:
a maximum amount to be paid in the year is created (calculation uses as a basis the amount paid in court judgments in 2016 and corrects this number for inflation); the court orders that fall outside this limit must be paid in other years
2) Linkage of expenses released after the PEC
What does the PEC say:
Senate wants the BRL 106 billion to be authorized after the completion of the entire PEC to be used only for some expenses
List of expenses:
Mandatory expenses (retirements, pensions and expenses linked to inflation), Brazil Aid and payroll exemption
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