Bolsonaro must veto R$3.1 billion from the 2022 Budget to restore personnel expenses

President Jair Bolsonaro (PL) must veto R$3.1 billion in expenses approved by the National Congress in the 2022 Budget. The measure is necessary to restore personnel expenses that were underestimated by parliamentarians.

The value is much lower than the need of R$ 9 billion pointed out by the Ministry of Economy, as revealed by the leaf. But the political cost of a more aggressive cut in spending ultimately weighed on the decision. The deadline for sanctioning the Budget ends this Friday (21).

The forecast is that the sanction act, with the vetoes, will be published in the edition of the Official Gazette on Monday (24).

The size of the cut was confirmed by the executive secretary of the Civil House, Jônathas Castro, in a podcast released by the ministry. According to him, the government’s option is to carry out “only vetoes that are essential”.

“The indicative is just, following the essential veto line, for us to veto R$ 3.1 billion so that we can recover personnel expenses. All of this was very well discussed, very well articulated with all the actors in the process”, said Castro.

If he chose to fully comply with the request of the team of Economy Minister Paulo Guedes, Bolsonaro would need to sacrifice resources from other portfolios or rapporteur amendments – an instrument used by allied congressmen to direct funds to their electoral strongholds.

The government’s political decision, however, was to shield the rapporteur’s amendments, which total R$ 16.5 billion. The option is also to avoid a more significant cut now, restoring only the amount that would actually be mandatory, as is the case with personnel expenses.

According to government sources heard by the leaf, the R$ 3.1 billion will come from discretionary expenses (which include funding and investments) and from the so-called commission amendments, another instrument created by Congress to distribute resources.

Of the R$3.6 billion allocated by Congress to commission amendments, however, R$1.7 billion needs to be preserved, because it corresponds to the reserve to grant readjustments to public servants. Thus, the space for vetoes in this allocation is R$ 1.9 billion.

In the discretionary ones, the technicians’ proposal is to take resources from folders that had budget gains during the Budget process. This includes the ministries of Citizenship, Welfare and Labour, Infrastructure, and Science and Technology.

Sources told the report, however, that infrastructure cuts are unlikely because public investments planned for 2022 are already very depressed. The portfolio is commanded by Tarcísio de Freitas, who should run for government of the state of São Paulo with the support of the president.

The decision on the cuts in the 2022 Budget is being closely monitored by the Civil House, headed by Ciro Nogueira (PP), one of the main exponents of the center.

In addition to being part of the JEO (Junta de Execution Budget), a forum for government definitions of the Budget, the Civil House will also now have the power of the pen over any changes in the execution of expenditures. A decree by Bolsonaro stipulated that the movements made by the Economy must have prior approval from Nogueira’s portfolio, as revealed by the Ministry of Health. leaf.

Technicians in the economic area claim that the role in defining the vetoes to the 2022 Budget has been all of the Civil House.

The Economy had asked for a bigger cut because, in addition to personnel expenses, it needed to recover R$ 777.9 million from the electoral fund and another R$ 5 billion in the cost of expenses of the ministry itself.

The ministry headed by Guedes suffered a 50% cut in its funds, which was seen as retaliation by congressmen, with whom the head of the economic team has a troubled relationship.

as showed the leaf, the government has now given up on making the necessary cut to rebuild the electoral fund to avoid tightening the other portfolios and also to keep Bolsonaro’s fingerprint away from increasing resources for campaigns – something criticized for its more ideological base.

According to the LDO (Budget Guidelines Law), the value of the electoral fund needs to be R$ 5.7 billion, but the Budget foresees only R$ 4.9 billion.

The expectation is to recompose this amount in the future, as the execution of the Budget shows available spaces in other areas. The same treatment will be given to the discretionary ones of the Ministry of Economy.

According to government technicians, although the electoral fund is a mandatory expense, the National Congress itself approved a lower amount, which frees the Executive from carrying out the immediate restoration.

In the case of personnel expenses, the Economy sent a value proposal, which was reduced by parliamentarians. As there is a possibility of legal questions about the constitutionality of this court, the economic area understands that the immediate return of the money is mandatory.

The outcome of the sanction of the Budget occurs on the same day that the departure of two undersecretaries of the SOF (Secretariat of the Federal Budget), linked to the Ministry of Economy, became public.

The resignation requests of the Undersecretary for Tax Affairs, Luiz Guilherme Pinto Henriques, and the Undersecretary for Budget Management, Márcio Luiz de Albuquerque Oliveira, were reported by the newspaper O Globo. They will be replaced, respectively, by Fabio Pontes and Clayton Montes, who already served on SOF boards.

According to interlocutors from the economic area, Henriques leaves the position after a period of preparation to study a master’s degree. Oliveira, who is a career server at the secretariat, will migrate to a more technical area. To interlocutors, he informed personal reasons for the decision.

Although there is no trigger for the exits, technicians from the government’s fiscal area have been fighting intense disputes with the political area to recompose mandatory expenditures and avoid out of control of expenses, which generates a natural wear, according to these interlocutors.