Alckmin says that the solution for the 2023 Budget will be defined ‘in the next few days’, but does not cite values

Vice President-elect Geraldo Alckmin (PSB) said this Tuesday (8) that the solution for the 2023 Budget will be defined “in the coming days” and that several alternatives are being analyzed by the transition team, of which he is coordinator.

The new government seeks to address the billion-dollar hole in next year’s budget proposal, which could impose a social blackout as early as early January. One of the main problems is the lack of sufficient resources to fund the minimum benefit of R$ 600 from Auxílio Brasil – which should be renamed Bolsa Família.

“This is not defined yet, there are several possibilities, one of them is a PEC [proposta de Emenda à Constituição] to guarantee these services, with a focus on the social area”, said Alckmin at a press conference at the CCBB (Centro Cultural Banco do Brasil), seat of the transitional government.

“The definition, if it will be PEC, if not PEC, the value, the format, this will be done in the next few days”, he said, without detailing the size of the bill projected by the new government.

Last Thursday (3), Alckmin even announced the negotiation of a PEC (proposed amendment to the Constitution) of the Transition, to leave a series of expenses free from the reach of fiscal rules such as the spending ceiling, which limits growth. expenses to the variation of inflation.

In recent days, allies of the president-elect, Luiz Inácio Lula da Silva (PT), cited behind the scenes a preliminary calculation of R$ 175 billion in expenses outside the spending ceiling to ensure the Bolsa Família and also rebuild the budget in essential areas. , such as health and education.

To facilitate negotiations, the PEC would be reported by Senator Marcelo Castro (MDB-PI), who is also the general rapporteur for the 2023 Budget. The concentration of the two reports could simplify the work of tuning the adjustments in each of the proposals.

Lula’s allies, however, criticized the PEC option, for forcing the new government to commit its political capital to a delicate articulation to approve a constitutional change, which requires the support of 308 of the 513 deputies and 49 of the 81 senators.

One of them was Senator Renan Calheiros (MDB-AL), a political opponent of the Speaker of the Chamber, Arthur Lira (PP-AL), who would gain bargaining power with the submission of the PEC. Renan told the Panel column, from Sheetthat the proposal would be a “barber shop”.

The search for alternatives has brought some additional options to the table. One of them is to resort to a precedent from the TCU (Union Court of Accounts) to cover part of the necessary expenses with extraordinary credits, an instrument that is outside the spending ceiling and is intended for urgent and unpredictable expenses.

as showed the Sheethowever, this path faces some technical obstacles, since it does not solve the obstacles of the fiscal target (which allows a deficit of up to R$ 65.9 billion next year) and the golden rule (which prevents the issuance of public debt to cover current expenses, such as social benefits).

Another option is to seek support from the STF (Supreme Federal Court). A decision by the Court in 2021 determined the Executive Branch to regulate the Citizen’s Basic Income, provided for in a 2004 law, until the end of 2022.

The understanding is that the regulation was met through the implementation of the Auxílio Brasil of at least R$ 400, at the end of last year.

This year, the minimum benefit was raised to R$600, but only temporarily.

According to interlocutors from Lula’s team heard by the Sheetthe strategy would be to obtain a new court decision in the sense that, given the Basic Income law, the government cannot reduce the amount —determining the maintenance of R$ 600. With this understanding, the way is opened for extraordinary credit.

Behind the scenes, however, there is a preference for the PEC, because the proposal approved by Congress would be the best way to give “legal protection” to Lula’s actions after he takes office as the new president of the Republic.

One of the PEC models under study could exclude from the spending ceiling all the amount needed for Bolsa Família. The figure is calculated at BRL 175 billion, considering the minimum benefit of BRL 600 and an additional BRL 150 per child up to 6 years of age.

In this format, the BRL 105.7 billion currently reserved in the Budget proposal for Aid Brazil — just enough for an average benefit of BRL 405.21 — would be redistributed to other areas that need supplementation, such as health, education and public works. .

However, combining the alternatives cannot be ruled out. There is the possibility of foreseeing the additional expenses in the Budget, leaving them conditioned to the approval of the PEC —which would give more time for the approval of the text in Congress—, and to fund the initial payments of the social program with the money already guaranteed. It would be an anticipation of the flows of funds foreseen for Bolsa Família, until the PEC is approved.

The final decision, however, will depend on a series of meetings with political leaders scheduled to take place in the coming days.