PT agrees to negotiate lower expenses and term outside the ceiling in PEC, says leadership

The leader of the PT in the Senate, Paulo Rocha (PT-PA), said this Thursday (1st) that the government of the president-elect, Luiz Inácio Lula da Silva (PT), is willing to negotiate a reduction in the fiscal impact of the PEC (proposed amendment to the Constitution) of the Transition to an amount close to R$ 150 billion.

As shown to Sheetthe organizers of the proposal had already been evaluating the possibility of establishing this reference for the authorization of extra expenses in 2023.

The calculation was made by Lula’s transition team as an indication of the expansion margin in expenses to match what should be spent in 2022, the last year of the administration of Jair Bolsonaro (PL).

“There are people proposing the R$ 150 [bilhões]”, said Rocha.

The text of the Transition PEC filed in the Senate provides for the exclusion of Bolsa Família from the spending ceiling, a fiscal rule that limits the growth of expenses. Although there is no explicit value in the body of the PEC, the PT estimates an expense of BRL 175 billion to maintain the minimum benefit of BRL 600 and pay an extra BRL 150 per child up to 6 years old.

By excluding Bolsa Família from the ceiling, the R$105 billion currently reserved for the program in the 2023 Budget could be redistributed to other areas. The text also provides for a device that allows for additional investments when there are extraordinary revenues, up to a limit of R$ 23 billion – in practice, the extract would rise to R$ 198 billion.

The design, however, has faced resistance in the National Congress. Therefore, the leader of the PT in the Senate indicates the possibility of a composition with the proposal presented by Senator Tasso Jereissati (PSDB-CE). The toucan defends the fixed expansion of the spending ceiling itself, in the amount of R$ 80 billion.

“What we are saying: so take these BRL 23 billion [para investimentos] and leaves the R$ 175 billion. But there are people proposing the R$ 150 billion. Yes, but where are you going to move? We are forecasting, in the R$ 105 billion, R$ 21 billion for investments. This can be made more flexible”, detailed Rocha.

“The priority is Bolsa Família, but then reduce the R$ 105 billion. That’s what Tasso Jereissatti is proposing, R$ 80 billion. So take R$ 20 billion from somewhere,” he added.

According to interlocutors interviewed by Sheetthe PT leader’s speech is indicative of the two possibilities that are on the negotiating table for the Transition PEC.

The first of them, inspired by Tasso Jereissati’s PEC, is to increase the spending ceiling by R$ 150 billion. It would even be possible to incorporate amendments to stamp this extra space for social spending.

The second alternative is to exclude Bolsa Família from the spending cap up to the limit of R$ 150 billion. In practice, it would be the same as ensuring payment of the minimum benefit of BRL 600 outside the ceiling and leaving the new installment paid to children within the expenditure limit —consequently, consuming part of the BRL 105 billion released in the Budget.

Technicians already have versions of drafts prepared with these two options — that is, they are ready to be incorporated into the report as soon as there is a political decision on the best path.

The PT leader also reaffirmed the possibility of making the duration of exceptional measures more flexible from four to two years.

“There is a point of flexibility which is time. They are proposing a negotiation for two, we agreed to discuss it”, he stated. For him, the maintenance of Bolsa Família in the amount of R$ 600 and the additional R$ 150 per child is “non-negotiable”.

PT wants to take PEC to the Senate plenary next Wednesday

According to Rocha, the elected government is negotiating with the president of the CCJ (Constitution and Justice Commission) of the Senate, Davi Alcolumbre (União Brasil-AP), to start discussions next Tuesday (6) to vote on the text in the commission and in the plenary on Wednesday (7).

The calendar was designed in order to contemplate a request for a view to be made by senators from Bolsonaro’s base – already indicated by themselves to the PT. The idea of ​​the elected government is to approve the PEC in the CCJ and in the plenary on the same day, to concentrate the negotiations on the text in the commission and also to guarantee the resolution of the impasse in the 2023 Budget later this year.

As shown to Sheet, Alcolumbre told Lula that he should take on the role of rapporteur for the text instead of appointing a member of the CCJ. The senator also signaled the reduction of the term of the PEC from four to two years.

There is an expectation that the PEC includes some device to release extra resources for 2022. The Bolsonaro government is facing difficulties to close the year, with a block that reaches R$ 15.4 billion in expenses —reaching parliamentary amendments and also essential spending of ministries.

The concern is also to contemplate this negotiation still in the Senate, to avoid delay in the procedure. If the PEC is modified in the House, there would be a need for a new vote in the Senate.

A constitutional amendment requires support from 308 out of 513 deputies and 49 out of 81 senators, in two rounds of voting in each House.

The leader of the PT in the Chamber and member of the transitional cabinet, Reginaldo Lopes (PT-MG), expressed confidence that the PEC of the Transition will be approved in both legislative houses within a period of two weeks. And that the last week before the parliamentary recess would be dedicated to approving the Budget.

The PT leader also added that it is essential that the text does not undergo changes during its course in the Chamber. Therefore, the team works to build conditions for approval in both Houses in the same way.

“I think it will be approved by the 15th, 16th of December. I think it will be approved next week in the Senate and then next week it will be approved in the Chamber and we will go to the week of the 21st and 22nd and vote on the Budget”, he added.