Opinion – Marcos Lisboa: Fiscally responsible Congress?

The result of the election for Congress, , with the strengthening of parties identified with the right, led to the interpretation that there should be fiscal moderation in the next government, regardless of the elected president. In the conventional view, the left would be more inclined to expand public spending, while the right would be against increasing the state.

This, however, is not what shows the voting pattern of the current Congress. In the last two years, at least 26 laws or other infra-constitutional norms and 12 more constitutional amendments were approved that, in whole or in part, go against fiscal responsibility.

Contrary to the dominant interpretation, many of these measures had the support of a significant majority of the right and center. In an article published this week, Marcos Mendes and I systematized this long list of changes to the legislation.

This year, 277 deputies were reelected, representing 54% of the total of 513 chosen for the Chamber. It is, therefore, a relevant sample of what will be the next legislature.

To analyze the voting profile by ideological spectrum, we can divide the parties into four groups:

• PL, Republicans and PP, allies of the current government and who can be called the “bolsonarist right”.
• Parties with a lower degree of alignment with the Bolsonaro government, often far from leftist theses, and relevant in the newly elected Congress, here called the “center”: União Brasil, MDB and PSD;
• Traditional left parties: the federation formed by PT, PV and PC do B, added to PDT, PSB and Rede;
• Other parties.

The participation of each group of parties in the new Chamber is very similar to that of re-elected parliamentarians. Therefore, major changes should not be expected in the next legislature.

This column highlights nine projects approved by the Chamber in 2020 and 2021, later sanctioned as a current norm. They are permeated by a mix of low fiscal responsibility, granting benefits to pressure groups and regulatory distortions that end up reducing the productivity and growth potential of the economy.

Center and right approved all the projects with expressive majorities, almost always with more than 95% of their parliamentarians. The left voted in favor in 7 of the 9 cases, with the support of a large part of its re-elected deputies. It is difficult to know which is more impressive, the fiscal lack of control of the right, or the alliance that was built with the left.

State health plan: legislative decree overturned the Ministry of Economy’s regulations that imposed rules and limits on state-owned companies’ expenses with the health plans of their employees, bringing them closer to what is practiced in the health plans of other workers. This corporate agenda for state-owned employees, usually supported by left-wing parties, was approved by 81% of parliamentarians from “right-wing Bolsonarista” parties.

PEC of precatories: authorized the non-payment of part of the precatories owed to expand the limit of the expenditure ceiling, even allowing the resources for the rapporteur’s amendments. The adhesion of the “Bolsonarist right” was almost unanimous, while the left was mostly against it.

semiconductor PEC: this amendment constitutionalizes the prohibition on deriving tax benefits from the “industrial policy for the information and communication technology sector and for the semiconductor sector”. Full support from left and right.

IPTU for churches: exempts churches from paying IPTU. It had massive support from the “Bolsonarist right” — largely made up of religious people directly interested in the benefit — and substantial support from other groups, including the left.

RELP: granting generalized Refis to small companies, without discriminating between the needy and the opportunists. It ran over the tax transaction instrument, created by the Federal Revenue Service, to serve companies with real installment needs. The project had an almost unanimous favorable vote, from right to left.

Renew: project that meets the interest of the automobile industry, by stipulating a subsidy for the exchange of old trucks for new ones. The “Bolsonarist right” and the “center” voted massively in favor of granting the privilege. The left did not board.

Agents’ floor: health agents got the approval of a PEC instituting a salary floor for the category and the right to special retirement. Almost unanimous approval.

nursing floor: similar to the case of the minimum wage for community health workers, but with the aggravating factor that there was not even a specification of the source of financing for new public expenditures. In addition, it has a relevant impact on private health institutions, generating pressure for the Union to absorb the private cost. New almost unanimous vote.

PEC kamikaze: constitutional amendment whose motivation was to increase the income support program for the poorest. Without any relevant objection, however, it included tax benefits for mill owners and distribution of money to taxi drivers and truck drivers, in addition to opening the door to government spending and current congressmen in an election year.

What is the reason to think that the new Congress will be responsible with public accounts?