Lula will have a plan to cut expenses and control spending on personnel, says Wellington Dias

Senator-elect Wellington Dias (PT-PI) said this Wednesday (16) that the new government of Luiz Inácio Lula da Silva (PT) will “certainly” have a plan to cut expenses and control spending on personnel and funding.

He did not, however, give a deadline for this plan to be presented and said that the details are being discussed by the technical group on the economy of the transition of government —composed of Persio Arida, André Lara Resende, Nelson Barbosa and Guilherme Mello.

“Lula is a president who has a lot of responsibility for controlling public accounts. There will certainly be a plan to cut expenses, there will be a plan to control expenses like [com] personnel, costing and several others, with a view to having measures that will allow us to bring the indebtedness, which is close to 90% of GDP, to a lower level”, said Dias.

“All this effort is part of a strategy that is being worked on exactly by the economy group”, he added.

Dias represents the transition team in the 2023 Budget negotiations and acts in the articulations of the PEC (proposed amendment to the Constitution) of the Transition, whose draft was delivered this Wednesday (16) with the forecast of allowing up to R$ 198 billion in expenses outside the spending cap next year. The limit, however, was not fixed in the text, being an estimate by Lula’s team.

One of the central points of the PEC is the exclusion of expenses with the Bolsa Família program from reaching the ceiling. The estimate is that this expense alone will be R$ 175 billion.

The model prevailed despite the warnings coming from the financial market, which sees in the size of the invoice a risk of losing control of the public accounts —especially if the measure is adopted permanently.

Even if the deadline is four years, the calculation being made by some analysts is that the new government will be authorized to spend R$ 700 billion outside the ceiling in the period —a value close to the estimated savings with the Social Security reform, approved in 2019 by the current administration.

After delivering the draft of the PEC to the National Congress, the elected vice president, Geraldo Alckmin (PSB), sought to minimize investors’ fears. “We’ll explain. People will be calmer,” he said.

Amidst the pessimism of the market, economist Persio Arida stressed, on Tuesday, that fiscal and social responsibilities “go hand in hand” and that creating “exceptionalities” and expenditure linkages are not the best way to resolve the impasse in the 2023 Budget. of integrating the transition, he is close to the vice-elect and is quoted to occupy the position of Minister of Finance.

Until Monday (14th), the transition group had still not had access to the PEC, which was requested from the transition coordination. This Wednesday, the group is already aware of the content of the proposal and should have new meetings in the coming days to analyze the text and eventually offer suggestions.