TCU says government can use extraordinary credit ‘if it meets requirements of the Constitution’

The TCU (Tribunal de Contas da União) responded generically to a query made by the Civil House on the possibility of using extraordinary credit to fund a portion of Social Security expenses, this Wednesday (7).

In an agreement decided in a close vote by 4 to 3, the ministers replied that the government can make use of extraordinary credit “provided that the constitutional requirements are fulfilled”.

“It is appropriate to open an extraordinary credit by means of a provisional measure, provided that the conditions of relevance, urgency and unpredictability of the expense are met, when the insufficient allocation may lead to the interruption of mandatory primary expenses of the Union, such as those of a social security nature” , says the document.

As a rule, they cited the jurisprudence of the STF (Federal Supreme Court) and articles 62 and 167 of the Federal Constitution. The process has the rapporteur of Minister Antonio Anastasia.

Prior to the decision, the TCU had asked the Ministry of Economy for information on the exact allocation of funds, should the court of accounts decide to comply with the Executive’s request.

The opening of extraordinary credit, outside the spending ceiling, would be to cover expenses whose growth is classified as “unexpected” by the government. The thesis is that these expenses grew a lot after the acceleration of analysis of applications and the reduction of the waiting list, leaving the government with no room for maneuver in the Budget in the last months of the year.

The hypothesis sent to the TCU was “unpredictable and extraordinary growth in mandatory expenditure, combined with the absence of adequate legal instruments for the demand for additional credit due to time constraints”.

The hole in mandatory expenses is estimated at R$ 22.3 billion, of which 70% correspond to Social Security (R$ 15.4 billion).

There was a concern in the court to avoid a kind of triangulation of resources, removing part of the INSS (National Social Security Institute) expense from the ceiling and making room for unblocking expenses with the so-called rapporteur amendments —instrument used as a bargaining chip in negotiations policies with Congress. The maneuver would be punishable.