Bolsonaro gives power to the Civil House in the execution of the Budget, in a setback for Guedes

In yet another setback for Paulo Guedes, President Jair Bolsonaro (PL) divided responsibility for the execution of the 2022 Budget between the Ministry of Economy and the Civil House, leaving the pen also in the hands of Ciro Nogueira (PP), chief of the center. .

The measure is contained in a decree that delegates the powers of the president to make adjustments and rearrangements in the budget piece, published in the Official Gazette of the Union on Thursday (13), confirming a report by the leaf of Wednesday night.

This Thursday, the Economy defines the details of the allocation of resources to the ministries during the execution of the Budget, based on a global limit pre-defined by the JEO (Board of Budget Execution). Now, the decree must provide that these acts must have the prior consent of the Civil House.

In a note released about the decree, on Wednesday night, the Planalto Palace did not mention the change, which was confirmed to the report by government sources.

Unusual, the measure comes at another moment of intensifying dispute between the teams of Paulo Guedes and palace assistants. At stake is also Bolsonaro’s attempt to consolidate political support for the election, in which he emerges as the second favorite, behind former president Luiz Inácio Lula da Silva, according to Datafolha.

Behind the scenes, government sources try to minimize the impact of the change, although they admit that it can be interpreted as a loss of power by the Minister of Economy in budget decisions.

At the end of 2021, for example, the JEO set a limit of BRL 3.6 billion for the payment of debts with international organizations, but the decision of which institutions would receive the money was taken by the Economy. With the decree, the act would need the approval of Nogueira’s portfolio.

The JEO is formed by the Ministers of Economy and the Civil House, so that Nogueira already participates in important decisions of the Budget, such as how much each ministry receives from the total budget.

Now, with the prerogative to give prior approval or not, he will have the power to define details, such as which actions within the folders should be prioritized in the distribution of resources.

The Civil House also gains greater control over the changes requested by Congress in the execution of the so-called rapporteur’s amendments – used by parliamentarians to irrigate their electoral strongholds with resources from the Budget. Today, these changes are concentrated in the hands of the Economy.

In the previous three years of Bolsonaro’s administration, only the Ministry of Economy was responsible for the measures to implement the spending, as is usually the practice in these cases.

Technicians in the economic area admit they are not aware of precedents for the Civil House’s participation in this stage, which involves operational details, in addition to the allocation of financial limits and resources in the ministries.

Between 2019 and 2021, the decree, edited annually, only gave Guedes the power to make operational changes. There is the expectation, however, that the entry of the Civil House at this stage can bring a “government vision” to the execution phase.

The definition of fiscal limits, to ensure compliance with rules such as the spending ceiling (which limits the advance of expenditures to inflation) and the primary result target (which results from the difference between collection and expenditures), will continue to be given by the Economy , said a government source.

Delegating competence helps the Economy to streamline all budget engineering, which involves trillions of resources every year. Behind the scenes, technicians avoid talking about a “power war” over the Budget.

However, the change comes shortly after an episode that further strained the relationship between the Economy and the political wing of the government, due to the lack of funds to honor the payment of parliamentary amendments at the end of 2021.

Parliamentarians expected to receive R$ 600 million, but the resources were not released by the Economy. The impasse triggered a crisis in the first week of the year with one of the parties of the government’s allied base, the Republicans.

The execution of the amendments was precisely the epicenter of the dispute, which led to the frying of the Chief Minister of the Secretariat of Government, Flávia Arruda, who had pledged her word that the payments would be made.

The leader of the party in the Chamber, Hugo Motta, even publicly asked for Flávia’s departure. However, Bolsonaro came out in defense of his minister and said he did not know where she was going wrong.

The disagreements between the political and economic wings of the government date back to the first year of Bolsonaro’s administration. In the most recent period, members linked to Congress advocated that the government spend more in the election year, while Guedes’ team tried to hold back spending.

One of the most emblematic moments of this dispute was last year, when the president decided to increase the value of Auxílio Brasil, the successor to Bolsa Família, to R$400.

The change, which had the support of the political ministers, was only possible with a change in the calculation of the spending ceiling, and represented one of the biggest defeats for Paulo Guedes, who saw part of his team abandon their positions after the decision.

At the time, rumors emerged that the minister could leave the government. To ward off the rumours, Guedes held a press conference alongside Bolsonaro at the ministry’s headquarters, at which time he guaranteed his permanence on the team.

“I know the president didn’t ask for this, because I believe he trusts me and I trust him, but I know that a lot of people from the political wing have been offering names and fishing,” said the Economics head at the time.