Leaders of the center articulate to insert a jabuti in the PEC (proposed amendment to the Constitution) of the Transition to be able to unlock parliamentary amendments of 2022 that are currently frozen due to lack of space in the Budget. Members of the Jair Bolsonaro (PL) government also participate in these conversations.
The Transition PEC has been sponsored by the elected president, Luiz Inácio Lula da Silva (PT), but with another objective. The purpose is to guarantee the continuity of the minimum benefit of R$ 600 from Auxílio Brasil (which should be renamed Bolsa Família) starting next year.
Currently, almost R$ 7.7 billion of the rapporteur’s amendments, used in the political negotiation between the Planalto Palace and Congress, are blocked. The amount represents 46.7% of the total of R$ 16.5 billion reserved for this instrument.
The president of the Chamber, Arthur Lira (PP-AL), has in these amendments an important bargaining chip to gain support from parliamentarians for his re-election to the command of the House, in February next year. The lack of money to release them has been addressed by Lira and the Chief Minister of the Civil House, Ciro Nogueira, who is also from the PP.
The money needs to be released by the end of December this year so that the ministries can commit the money (first phase of spending, when the government commits to acquiring a good or service). Otherwise, the amount initially reserved for amendments will be lost, as a new Budget starts to be executed on January 1st.
Part of the blocked resource has already been negotiated by Lira with allied congressmen, but has not been paid because of the blockade of funds. Another portion was being saved by the president of the Chamber to be used at the end of the year, when the articulations for the election to the command of the House gain strength.
The articulation with the objective of using Lula’s proposal to alleviate Bolsonaro’s latest Budget was confirmed to the Sheet by leaders of the center and by members of the current government.
The PEC da Transição has been stitched together by PT’s team to fulfill PT’s campaign promises. In addition to maintaining the minimum amount of BRL 600 for Auxílio Brasil, an extra benefit of BRL 150 per child up to six years of age in the social program and a real increase (above inflation) in the minimum wage would also be made possible.
The tendency is for Bolsonarista allies to seek to include provisions in the text to leave expenses outside the 2022 spending ceiling. The objective is to have enough space to pay the amendments without bumping into the fiscal rule.
The plan being drafted by the center and Bolsonaro’s allies should boost criticism of the PEC within the Lula base.
Despite the PT having told interlocutors that he should opt for the PEC path to solve the budget problems of the first year of the new government, there are allies who resist this idea precisely because it gives Lira bargaining power in the negotiations.
One of the criticisms came from Senator Renan Calheiros (MDB-AL), who was nominated this Wednesday (9) to represent his party on the political council of Lula’s transition team. He told the Panel, from Sheetthat the PEC “is a barber shop”.
The Planalto Palace promised Lira that the amendments would be released shortly after the elections, but this scenario did not materialize. Some factors have made it difficult for the technical team to try to find space within the spending ceiling, a rule that limits the growth of expenses to inflation.
The most recent of them is due to a decision by the Federal Supreme Court (STF) this week. Minister Cármen Lúcia suspended an MP (provisional measure) signed by Bolsonaro to postpone payment of transfers to the cultural sector, referring to the Paulo Gustavo and Aldir Blanc laws 2. The majority of the Court agreed with the minister’s position.
The MP was edited by the Chief Executive in an attempt to postpone an expense of R$ 3.8 billion, approved by Congress and which should have been paid this year. With the decision, Palácio do Planalto will need to incorporate this expenditure back into the Budget, which will force the government to make cuts in other areas.
The Aldir Blanc 2 law, in turn, provided for a transfer of R$ 3 billion next year. The suspension of the MP, therefore, will not have an immediate effect on the accounts.
Another factor that worries Bolsonaro’s team is the increase in Social Security spending, due to the reduction of the waiting list for analysis of requests for pensions and other benefits.
A task force led by the current administration of the INSS (Instituto Nacional do Seguro Social), with payment of a bonus for extra analysis, has contributed to shortening the queue. The measure serves policyholders, but ends up having a negative effect on government accounts. As it is a mandatory expense, Bolsonaro is unable to postpone it.
In addition to concerns about the cap on spending, ministries may face operational constraints to implement amendments so close to the end of the year.
By the rules of the Ministry of Economy, only values of works or acquisitions that will be carried out in the financial year can be pledged. “Such expenses must be committed in each financial year by the part to be executed therein”, informed the National Treasury to Sheet🇧🇷
In such a short period, however, it is difficult for the ministries to have enough time to sign agreements and sign contracts that justify the expense.
In 2020, the TCU (Union Court of Auditors) understood that the Covid-19 pandemic was a plausible justification for making this rule more flexible. The cut of accounts allowed the commitment of expenses that would only be carried out in the following year, in a controversial decision that went against the technical area.
As a result, the government issued a decree that authorized the commitment in 2020 of amendments that would be implemented until December 31, 2021. The authorization, however, was only valid for that year.
“The text of the aforementioned decree expressly contemplates that the exceptional rule was applied only in the 2020 financial year, not fitting its application between the 2022/2023 financial years”, says the Treasury in a note.
Technicians take for granted the search of congressmen from the center for a new exception this year.
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