Budget Report ignores civil servants readjustment and forecasts R$ 5.1 billion for fund

Deputy Hugo Leal’s final report (PSD-RJ) for the 2022 Budget foresees an addition of R$ 3 billion to the electoral campaign financing fund, totaling R$ 5.1 billion. In addition, it provides for R$ 16.5 billion for rapporteur amendments — used as a currency for political negotiation in Congress.

In addition, the text does not provide resources for salary readjustments to civil servants — even after a request by President Jair Bolsonaro (PL).]

The vote on the opinion was scheduled for this Monday (20) at the CMO (Joint Budget Committee). However, differences over the numbers presented by the general rapporteur caused the postponement of the meeting, which should only take place on Tuesday (21). After approval, it will be taken to the plenary of Congress in separate sessions of the House and Senate.

Leal’s report was released in the early hours of Monday, days after the promulgation of the second part of the PEC (proposed amendment to the Constitution) of the Precatório — which circumvents the spending ceiling to expand the budget space. In the opinion, he says that, based on this amendment, R$ 45.6 billion will be paid next year, subject to the spending ceiling, referring to expenses arising from court rulings.

As a result, he continues, a fiscal space of R$43.5 billion was opened relative to the Executive’s spending ceiling. In total, says the deputy, a total fiscal margin of R$ 113.1 billion was created, R$ 110 billion of which within the Executive.

“It should be noted that this budget space allowed the allocation of the necessary appropriations to make the expansion of the Brazil Aid Program feasible, which will benefit approximately 17.9 million Brazilian families in poverty and extreme poverty, in addition to additional contributions to the areas of health, welfare and social assistance”, highlights the report.

The amount allocated to Auxílio Brasil is lower than the estimates made by technicians from Congress and by those used by the government itself about the amount needed to assist all families in poverty (defined in the text of Auxílio Brasil as those who earn less than R $210 monthly per capita). In the Executive, internal projections mentioned 21.6 million families in this situation.

For the rapporteur’s amendments, the deputy, who is the general rapporteur of the Budget, allocated R$ 16.5 billion, R$ 7.28 billion of which for health care actions and R$ 1.25 billion for the structuring of the SUAS (Single Social Assistance System) service network.

The amount was within the ceiling provided for in a draft Congressional resolution approved at the beginning of December and which stipulated the maximum amount of resources as the total number of taxable individual and bench amendments.

The amendments became the subject of controversy because of their use as a political bargaining chip. Starting with the 2020 Budget, the top of Congress began to implement a maneuver with the objective of maintaining its power as a bargaining chip — taking advantage of the political weakness of the Bolsonaro government, which was forced to give up part of the execution of this budget.

The approved draft resolution establishes new transparency criteria for the resources from the approval of the text – that is, keeping those who benefited from the rapporteur’s amendments in 2020 and 2021 still hidden.

In addition, the rapporteur added R$ 3 billion to the special fund for electoral financing, bringing the value to R$ 5.1 billion.

The rapporteur did not include funds for civil servants’ readjustments, disregarding a request made by the government last week. An official letter signed by Minister Paulo Guedes (Economics) to the Chamber asked that R$ 2.5 billion be set aside to increase salaries, as proposed by Bolsonaro.

Congress’s justification for not complying with the request is the fact that the government failed to indicate a specific bill on the intended career restructuring and also did not provide for budgetary compensation.

According to an analysis carried out by the Chamber and Senate Budget consultants, the government asked for compliance with “PLs relating to the restructuring and/or increase in the remuneration of positions, functions and careers within the scope of the Executive Branch”. According to the analysis, the format contravenes the provisions of the 2022 Budget Guidelines Law, which requires the specific indication of a proposed law.

“Furthermore, the Official Letter does not indicate the origin of the resources (compensation) for the increase in remuneration, generating fiscal imbalance and non-compliance with the spending limit if met without the respective compensation”, states the technical note of the consultants.

Despite the request, Guedes sought to be annoyed and said that the increase for some categories is a disgrace to his contemporaries – as he uses public resources at a time of the country’s recovery. For him, the scenario would be even worse if everyone had readjustments.

“If everyone has these increases, it is a disgrace to future generations. Then inflation will return, we will plunge into a dark past, we will snowball into debt. Our role is to ensure that this does not happen,” he said.

The defense for readjustments was taken over by Bolsonaro, who acted directly to ensure the restructuring of police careers in the federal government. The movement triggered pressure from other categories, such as auditors from the Internal Revenue Service.

On the last 8th, in an interview, the president even defended a broad adjustment, reaching all categories. He said the measure would be taken without breaking the spending ceiling.

“It would have [que ser reajuste de] 3%, 4%, 5%, 2%… Let it be 1%. This is the idea. Because we are completing three years in my government without readjustment. Now, the readjustment is not to restore all the inflation, because we don’t have space for that”, Bolsonaro said in an interview to Gazeta do Povo newspaper.

In the government’s calculations, each 1% linear increase to all employees has an impact of R$ 3 billion.