Transition team insists on BRL 175 billion of Bolsa Família outside the ceiling for an indefinite period

Political articulators from the team of the president-elect, Luiz Inácio Lula da Silva (PT), intend to present this Wednesday (16) the draft of the PEC (proposed amendment to the Constitution) of the Transition to withdraw R$ 175 billion in expenses foreseen with the Bolsa Familia from reaching the spending ceiling.

There is an expectation that the vice-president-elect, Geraldo Alckmin (PSB), who coordinates the transition work, will meet with the group working on the text and also with the general rapporteur for the Budget, senator Marcelo Castro (MDB-PI ).

The draft text should not impose a time limit on the measure, but PT members know that an important wing of Congress defends that it be valid only in 2023, the first year of Lula’s government. For this reason, the idea of ​​the organizers of the new government is to negotiate a period of four years, which is seen as a compromise to wave to sectors that fear a “blank check”.

This Tuesday (15), the Panel showed that Lula defended the four-year deadline to the president of the Senate, Rodrigo Pacheco (PSD-MG), in a private conversation in Egypt, where they are participating in the COP27, the United Nations climate conference.

The exclusion model of Bolsa Família from the spending ceiling continues to be defended by the political wing that has been conducting negotiations in recent weeks, despite the warnings coming from the financial market —which sees in the size of the bill a risk of lack of control of public accounts— and the own group of transition economists.

This Tuesday (15), economist Persio Arida said that creating “exceptionalities” and linking expenses are not the best way to resolve the impasse in the 2023 Budget. next to the vice-elect. Arida is also quoted to occupy the position of Minister of Finance.

Arida’s public statements drew attention for the fact that they criticized a point being negotiated by transition politicians. People close to Alckmin, however, seek to minimize any possible difference in views on the size of the license to spend and say that the discussion between the political and economic wing in the transition is natural.

So far, economists have not formally participated in the PEC negotiations. On Monday (14), the group released a note saying that it requested access to the text of the proposal and the data on which it was based.

“As soon as it is made available, the requested information will be analyzed and discussed by the transition team in new meetings”, says the note.

The size of the so-called license to spend has generated noise and uncertainty. News released by the Bloomberg news agency fueled market expectations about the possibility of a more conservative PEC, with expenditures of R$ 130 billion outside the ceiling —R$ 45 billion below the forecast with the withdrawal of Bolsa Família from the ceiling — cheered the market.

The Ibovespa, the reference index of the Brazilian Stock Exchange, rose 0.81%, closing the trading session on Monday (14) at 113,161 points. The spot commercial dollar fell 0.41%, quoted at R$5.3030, in a movement that went in the opposite direction of the rise of the American currency against other global currencies.

“I know that there are broader possibilities, which is the one that reaches R$ 175 billion, and there is the possibility of discussions of a smaller number as well”, says state deputy Emídio de Souza (PT-SP), who is part of the transition and close ally of Lula. He confirmed to the report that one of the lowest value alternatives is R$ 130 billion.

“It is being discussed internally [na transição] and also with Congress. Congress has to participate in this decision,” he says.

Politicians who are at the forefront of the negotiations, however, reaffirm their intention to proceed with the PEC that removes Bolsa Família from the spending ceiling. This was the version discussed with Congressional leaders and announced by Senator-elect Wellington Dias (PT-PI), representative of the transition in the Budget negotiations.

“All of us who participated have a commander there, the commander who was chosen by the people, who is President Lula. interview with Roda Viva, a program on TV Cultura, on Monday night.

This Tuesday, the elected senator reaffirmed his position Sheet🇧🇷 “Proposal with the need and technical support for the transition and positive sign from the president is exceptional for the new Bolsa Família, with value for children. And the value is easy to calculate: to maintain the R$ 600.00, R$ 157 are needed billion, and for the payment of R$ 150.00 per child, another R$ 18 billion.”

The Budget rapporteur also pointed out that he was not contacted to deal with possible changes in the course of the PEC articulations.

“One thing was agreed, and I’m hoping that on Wednesday they deliver what was agreed upon,” said Castro. He recalled that, last week, Alckmin and Dias participated in a series of meetings with parliamentarians to discuss a solution for the Budget.

“What we decided there is to exceptionalize Bolsa Família from the spending ceiling, and not a determined value. As it is a principle, there is no reason to reduce the value”, said the rapporteur, who is also quoted to take over the rapporteurship of the PEC of the Transition in the Senate. “What was agreed with several party leaders, the transition team led by Geraldo Alckmin, was that.”

The exclusion of Bolsa Família from the spending ceiling would release R$ 105 billion foreseen in the Budget for the social program. The money could then be redistributed to other actions, to recompose expenses that are currently compressed (with Popular Pharmacy and the social assistance network, for example) and to pay for Lula’s electoral promises, such as a real increase in the minimum wage (above inflation). and the expansion of public investments.

For Health alone, R$ 22.7 billion should be redirected. The logic is to ensure the maintenance of the minimum floor of resources for the area.

The deadline for withdrawal of the cap expense is considered an open point. The dome of centrão parties, which have allied themselves with President Jair Bolsonaro (PL), want to limit the opening of space in the Budget only to the year 2023.

The assessment is that a broad authorization, valid throughout the new Lula government, will take away from Congress’s bargaining power in negotiations with the PT.

Members of the transition team, however, say they intend to insist on the proposal to remove Bolsa Família from the ceiling for four years. The longer duration would give Lula’s team time to prepare a more consolidated proposal to reformulate the fiscal rules.

The PEC should begin to be analyzed by the Senate. The President of the House hopes that the proposal will be voted on by the end of the month by the senators.

Lula’s allies have already drawn up a plan to also speed up the processing of the PEC in the Chamber. The idea is to add the text to a proposal that is ready to be voted on in plenary by the deputies, avoiding mandatory steps such as going through the CCJ (Commission on Constitution and Justice) and the special committee.