Opinion – Vinicius Torres Freire: The Bolsonaro government’s plan was to end automatic spending readjustments

The idea of ​​changing the minimum wage readjustment was even being studied by the government of Jair Bolsonaro (PL). Only seers could tell if the study would turn out to be a project. But ending with automatic readjustments of social expenses, although not the minimum, was always a plan of Paulo Guedes.

Since the beginning of the government, the Minister of Economy said that his biggest project for the Budget was also to de-index expenses. That is, to end the automatic, mandatory readjustment, according to any indicator, such as past inflation, for example.

Retirement, pensions and other INSS benefits, unemployment insurance and salary bonus account for 51.3% of federal government expenditure. All are readjusted at least by past inflation, by the INPC, directly or indirectly. Mandatory expenditure on health and education takes at least 6% and is corrected by the IPCA. Only there were 57.3% of the Budget.

If Paulo Guedes did not want to de-index these expenses, end the mandatory readjustment, then what would he change?

There’s little left to move. About 20% of government spending is spent on civil servants’ salaries and pensions. The Constitution determines “annual general review” of salaries, but does not specify the readjustment. The government can move there, as it did with the almost general freeze on the salaries of federal servants, after the epidemic. But it cannot flatten the pay out of sight. However, there is no explicit indexing in this case.

So, any relevant attempt to de-index, unlink and release, Guedes’ “3Ds”, would imply ending with automatic readjustments and mandatory spending on social benefits and on health and education.

If Guedes says he doesn’t want to mess with it, his “3D” project was fiction. Or he had plans just to contain a little bit of minority spending, a lot of “immovables” as well. About two-thirds of total spending is indexed or tied (eg Fundeb spending or money going to the Federal District increases when government revenue increases). In other words, apart from INSS, mandatory education and health, there would be about 10% of the budget left over to move a little bit.

Since the beginning of the Bolsonaro government there have been “studies” on the subject, the “3Ds”. Practically nothing went forward, not even as a proposal. But it was always Guedes’ declared plan. The minister says time and time again that Congress should be free and unimpeded in deciding what to do with the Budget.

Congress, however, doesn’t want to get involved in this, or at least it never wanted to. He wants a piece of the Budget in order to benefit electoral corrals. But even in this country turned upside down with rotten entrails, it would be difficult to see the majority vote to reduce the real value of INSS pensions or, even less, the minimum wage.

Frankly, such a plan, to lower the real value of the minimum, wouldn’t even go down the slope that goes from the Ministry of Economy to the Planalto Palace. If he rolled over there, he would hardly cross the square to get to Congress. Not even the plan under consideration, to change the correction to an index MAYBE lower than past inflation, would go ahead.

The mere suggestion of unlinking the value of the INSS benefit floor from the minimum wage causes scandal (thus, there could be a real readjustment of the minimum without a greater increase in INSS spending, even if there was still a correction of pensions etc. for inflation).

The fact is that the Bolsonaro government had no project, other than institutional destruction. But he had “ideas”, such as CPMF variants, of making trillions with privatizations and the “3Ds”. Who gave birth to Matthew, let him rock him.