The Chamber of Deputies concluded this Wednesday (15th) the vote on the second part of the PEC (proposed amendment to the Constitution) of the Precatório, which postpones the payment of debts of the Union already recognized by the Justice and, thus, frees space in the Budget for promises of President Jair Bolsonaro (PL).
The basic text of the project, which releases another R$43.8 billion in expenses next year, was approved in the first round this Tuesday (14) by 327 votes in favor and 147 against. In the second round, concluded this Wednesday, the proposal received 332 votes in favor and 141 against. Now it proceeds to enactment.
Deputies withdrew from making significant changes to the text that has already been approved by the Senate. With this, it will no longer be necessary to send the proposal for further analysis by the senators.
By a majority, the deputies suppressed the provision that contains provisions for the payment of installments of the precatoria of Fundef (Funding for the Maintenance and Development of Elementary Education and for the Valorization of Teaching) within the same year. The Senate created this calendar to prevent the government from paying these resources to states ruled by political opponents only after the 2022 election.
Despite the deletion, essential points of the PEC were maintained.
In an interview upon arriving at the Chamber, Lira made a point of emphasizing that the deputies kept the core of the senators’ text, such as the linking of resources to the payment of the social program and the Fundef out of the ceiling.
“So it was a way of saying to the Senate that the Chamber, when it takes on its commitments, it fulfills. Calmly, without any kind of fanfare, with discussion,” he stated.
The PEC dos Precatórios is currently the main agenda of interest of President Jair Bolsonaro in Congress. The objective is to authorize the government to spend more and make viable the promise to raise the value of the Brazil Aid in an attempt to boost Bolsonaro’s reelection campaign in 2022.
With the approval of this second part of the PEC, the total effect of the proposal is reached — BRL 106 billion in 2022.
However, according to calculations by the Ministry of Economy, the amount is insufficient to meet the promise made by Bolsonaro to readjust civil servants, to expand the parliamentary amendments and to increase the resources of the fund for financing the electoral campaign.
In order to increase expenses for the next year by around R$106 billion, the previous PEC version had two pillars.
One of them, which has already been enacted and is already in effect, allows a dribble in the spending ceiling, making a new retroactive calculation of this limit.
The other measure, which was approved in the Chamber on Wednesday, creates a maximum value for the payment of court orders – debts that do not appear on this list will be postponed and paid off in later years.
This limiter for the discharge of debts must be challenged in court. The president of the National OAB Precatory Commission, Eduardo Gouvêa, has already said that he intends to file a lawsuit with the STF (Supreme Federal Court) against the measure.
The slicing of the PEC occurred because of changes made in the Senate to the text that had already been previously approved by the Chamber.
The senators fully maintained the part that circumvents the spending ceiling and releases BRL 62.2 billion in 2022.
The Chamber then needed to vote on the changes made to the pillar that deals with the payment limit for court-ordered debts, responsible for opening R$43.8 billion for new expenses in next year’s Budget in view of the postponement of debt settlement.
Deputies agreed to provide that the measure will be valid until 2026, and not until 2036 as was the previous version.
This was a demand from senators who fear that the creation of a ceiling on the payment of court orders will turn into a “snowball” and the Union will start accumulating too much debt in the future.
By reducing the validity period by ten years, the new version of the PEC does not change the effects of the proposal in the 2022 Budget.
The Chamber also approved the part that makes it clear that the increase in expenses in 2022, from the approval of the PEC, will be linked to mandatory expenses, the social area and the extension of the payroll exemption.
The text also provides for a mechanism for linking expenses that will no longer be paid in court orders to cover expenses with the social program and in the area of social security, such as pensions, between 2023 and 2026.
The Chamber also confirmed that the payment of debts linked to Fundef (a fund in the education area) will be outside the expenditure ceiling. This represented a defeat for the team of minister Paulo Guedes (Economy) who resisted this measure, but had to give in to approve the text in the Senate.
For 2022, there are more than R$17 billion in debt from Fundef transfers to states and municipalities. The PEC, however, splits this account in three years.
The economic team has the space of R$ 106.1 billion to be able to accommodate all the expenses foreseen for 2022.
To ensure the expansion of Auxílio Brasil, the government needs an additional R$ 51.1 billion.
Another R$ 48.6 billion will be allocated to the correction of social benefits for inflation, the expansion of the spending ceiling of other powers (due to the change in the rule) and the adjustment to the constitutional minimums for health and education.
There is also an extra bill of R$5.3 billion to pay for the extension of the payroll exemption for companies, a measure already agreed upon between the government and the National Congress.
According to leaf revealed, the vote of the first round of the original PEC was maneuvered by Lira to increase the chances of approval of the measure.
The text, a priority of the Jair Bolsonaro (PL) government, Lira’s ally, passed through the Chamber in the first round with a slack of only four votes — 312 favorable votes (at least 308) — in the early hours of November 4th.
Remote voting, as defined by Lira, allowed deputies “in performance” on an official mission trip to vote without registering presence in the plenary’s biometric identification system.
POINTS OF PEC
1) Change in the spending ceiling index
what is the ceiling: constitutional rule approved in 2016 that limits the increase of most federal expenditures to the inflation of the previous year
how is today: the ceiling is corrected by the inflation measured by the IPCA in 12 months until June of the previous year
how is it: the amount is recalculated, retroactively, based on the IPCA from January to December; in practice, it widens the roof.
2) Refills to municipalities
what does the PEC say: possibility for municipalities to pay debts to the Union in installments if they approve local Social Security reforms
Conditions: municipalities will have to demonstrate specific changes in social security rules. One is that municipal employees will not be able to pay lower rates than federal employees
3) Ceiling for payment of court orders
what is precatory: debts of the Union already recognized by the courts and without possibility of appeal
how is today: court orders entered in the Budget are paid
how is it: a maximum amount to be paid in the year is created (calculation is based on the amount paid in court judgments in 2016 and corrects this number for inflation); the court orders that fall outside this limit must be paid in other years
4) Linkage of expenses released after the PEC
what does the PEC say: the BRL 106 billion to be authorized after the completion of the entire PEC would only be used for some expenses
list of expenses: mandatory expenses (retirements, pensions and expenses linked to inflation), Brazil Aid and payroll exemption
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