Budget Rapporteur says Transition PEC will remove Bolsa Família from spending ceiling forever

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The rapporteur-general of the 2023 Budget, Senator Marcelo Castro (MDB-PI), said this Thursday (10) that the PEC (proposed amendment to the Constitution) of the Transition will remove expenses with Auxílio Brasil (which will return to to be called Bolsa Família) of reaching the spending ceiling — a fiscal rule that limits the advance of expenditures to the variation of inflation.

The change, he said, would be permanent. “The idea is that it be permanent, that there is a commitment of Brazilian society to the most needy, the poorest, that they can feel that there is security, and that these resources are forever exceptional”, said the senator after a meeting on the subject at the residence President of the Senate, Rodrigo Pacheco (PSD-MG).

Vice-president-elect Geraldo Alckmin (PSB), who coordinates the new government’s transition team, and elected senator Wellington Dias (PT-PI), budget negotiator, also participated in the conversations. The group also met with the president of the Chamber, Arthur Lira (PP-AL).

The announcement comes after President-elect Luiz Inácio Lula da Silva (PT) criticized the spending cap, a fiscal rule that limits the growth of expenditures to inflation, and defended a “new paradigm” that allows a focus on the social, as preached in his campaign.

“Why are people made to suffer to guarantee such fiscal stability in this country? Why do people all the time say that spending must be cut, that it is necessary to have a surplus, that it is necessary to have a spending ceiling?”, he said in a speech. at the CCBB (Centro Cultural Banco do Brasil), seat of the transitional government. “Why don’t we establish a new paradigm?”, he asked.

PT’s speeches were poorly received in the financial market, which fears a lack of control of public accounts and indebtedness in the wake of increased expenses. The vice-elect reacted to these criticisms. “If anyone had fiscal responsibility, it was the Lula government,” said Alckmin.

as showed the Sheet, the idea of ​​removing all expenses with Bolsa Família from the spending ceiling had already been gaining strength in recent days. The change would leave an expense of BRL 175 billion off the ceiling, while the BRL 105.7 billion currently reserved for the social program would be redistributed to other areas that are at risk of blackout.

The text of the PEC needs to be presented soon so that it can begin processing. It is from there that the changes to the 2023 Budget proposal will be made. The proposal needs to be at least filed so that Castro can incorporate more expenses in his report, even if they are conditioned to the approval of the constitutional change.

The Transition PEC is considered necessary to guarantee the continuity of the minimum benefit of R$ 600 from Bolsa Família from January onwards. The expense to ensure this value amounts to R$ 157 billion. The PT also promises an extra share of BRL 150 per child up to six years of age in the social program, at a cost of BRL 18 billion.

Members of the new government prefer a permanent removal of Bolsa Família expenditures from the spending ceiling. They were even alerted by members of the CMO (Mixed Budget Committee) about the risk. The suggestion of the collegiate was to limit the measure to a period of up to four years.

Castro sought to assuage fears and said approval of the proposal would not mean a “blank check” for the new government. “So that there is no doubt that it can be a blank check to spend on whatever the government wants. There it will be clearly specified, so many billions, for example, for Popular Pharmacy, indigenous health, school lunches, Minha Casa, Minha Life,” he said.

“There was a good reception from all the leaders. From today to tomorrow the team will talk to me again to officially present, to hand me the text of the PEC saying which are the items that will be exceptional and the value of each one”, he said.

The Budget Rapporteur also said that the possibility of allowing expenses outside the spending ceiling is under discussion, as long as they are financed with extraordinary revenues – that is, above those foreseen. He cited as an example the collection of bonuses from oil auctions. The expense would be financed by means of extraordinary credit, in an amount limited to 2% of the RCL (net current income).

🇧🇷[Os 2%] They would be permanent too, at least that’s what I’m understanding. It has to be seen how this will be written in the PEC. Spend up to 2% of current net income,” Castro said.

Earlier, Wellington Dias confirmed the discussion about taking a portion of spending supported by extra revenue from the ceiling, but said that this is a suggestion by the House and Senate.

“This proposal was not from the transition team, it came up in the House and Senate. We ask for an effort on the allocation of amendments, for a significant part to be prioritized as ‘amendments for investments’, to help integrate and expand private investments, with better results in the social and fiscal economy”, he said.

According to the elected senator, the new government wants to reach a level of 1% of GDP (Bruno Domestic Product) in public investments in the first year of administration. This would mean an amount of around BRL 100 billion already in the 2023 Budget proposal.

Dias said the measure is “feasible”. Today, the Budget already reserves about R$ 22 billion for public works and other investments.

According to the elected senator, the idea is to negotiate with parliamentarians the allocation of another R$ 20 billion from the amendments — individual, bench and rapporteur. Altogether, the amendments add up to R$ 38.8 billion, that is, if the articulation prospers, this would consume half of these funds.

The rest would be made possible through the BRL 105 billion space opened in the spending ceiling through the Transition PEC

The PEC should begin to pass through the Senate, where the rite of voting for a constitutional amendment is simpler. Even so, the text will not go straight to the plenary. He will first go through the CCJ (Constitution and Justice Commission), informed Wellington Dias.

Castro is quoted to be the rapporteur of the PEC, since he is also the general rapporteur of the 2023 Budget. The accumulation of the two rapporteurs would facilitate the negotiations.

Earlier, Castro said that the process in the Senate is faster for the approval of the Transition PEC. In the Chamber, according to him, the text approved by the senators would be attached to PEC 24, which has deputy Tabata Amaral (PSB-SP) as rapporteur. The measure helps to speed up, since the normal procedure would require consideration by the CCJ (Constitution and Justice Commission) and the special commission.

The proposal, authored by deputy Luisa Canziani (PTB-PR), proposes to increase the financial autonomy of federal educational institutions, removing their expenses from the scope of the spending ceiling.

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