Economy

Lira expands advantage, and Chamber approves PEC dos Precatórios in the first round

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Despite losing support on the bench of the opposition PDT, the government and the president of the Chamber, Arthur Lira (PP-AL), managed to broaden the base of support for the PEC (Proposed Amendment to the Constitution) of the Precatório this Tuesday (9) .

Tonight, the Chamber finished voting on all the highlights and concluded the first round vote. Then, deputies began to analyze the text in the second round.

Based on an operation that involved the distribution of R$ 1.4 billion in parliamentary amendments in the last two weeks, among other offensives, the government managed to maintain, with one exception, the main points of the PEC.

The proposal is a priority of the Jair Bolsonaro government (without a party) to make the R$ 400 Brazilian Aid feasible and expand the federal spending ceiling, allowing the allocation of resources for other purposes.

The basic text of the PEC in the first round was approved last week by 312 votes, just 4 more than the minimum necessary to change the Constitution.

On Tuesday, the attempts to change — the so-called “highlights” — were overthrown by larger margins: from 316 to 412 votes.

The PEC, if approved by the Chamber and Senate, will release more than R$91 billion in spending for the 2022 election year, in which Bolsonaro is likely to seek re-election.

In the first round, the government suffered only one defeat. The setback, however, did not affect the proposal’s pillars.

Deputies withdrew a provision that released the executive from asking for specific authorization from Congress to violate the golden rule, which prevents the government from going into debt to pay current expenses, such as salaries and pensions.

The rule aims to prevent the country from financing current expenses leaving the bill for future generations.

Instead, the rule seeks to direct the use of debt resources to public investments, such as works or construction of schools and hospitals —which remain over time and, therefore, can be used by future taxpayers.

Financing current debt expenditures can only take place today if Congress authorizes the targeting to precise purposes and after an absolute majority vote.

The economic team’s intention was to eliminate the specific stage of the request to Congress and obtain approval from the Constitution to cover current expenses, as long as the amounts were foreseen and authorized by the Budget (which will still need to go through the parliamentarians). However, the process would be simplified.

The text was excluded by 303 to 167 — it needed at least 308 votes to be retained.

The decision came after the PDT changed its stance and steered against the PEC, after voting in favor of the main text last week.

The PDT bench, which has 25 deputies, last week gave 15 votes in favor of the basic text of the proposal. This contributed to the narrow victory of the government, but it opened a crisis in the party.

Ciro Gomes (PDT) claimed to have suspended his candidacy for president of the Republic in protest against the decision of the bench.

The party’s leadership then acted to reverse the support of deputies to the PEC, which is seen as a measure to strengthen Bolsonaro’s campaign for re-election. On Tuesday, only 4 to 5 of the 25 deputies of the party were voting with the government.

Because of the PDT’s threat of changing the route, which was confirmed, Lira and the government sought to broaden their support base among allied deputies who did not vote in the first round, in the DEM, MDB, PSDB, PP, PSL and Republicans.

About 30 deputies of these acronyms who did not take a position last week started to support the government.

Another part of the strategy was to guarantee votes from deputies outside Brasília.

Last week, the president of the Chamber, Arthur Lira (PP-AL), edited an act to allow remote voting of those who are on a mission authorized by the House, which was contested by the opposition.

On Monday (8), Lira edited another act to release from the biometric presence record of pregnant women or congressmen in health condition that makes face-to-face work impossible, as long as authorized by the president of the Chamber and by means of a document that proves the state of health of the congressman.

There are currently 17 on a mission authorized by the Chamber. Of this total, 12 would vote in favor of the PEC. Another six who presented a medical certificate would also be favorable to the text.

Among the highlights overturned by the government was that of the MDB, rejected by 316 votes, which tried to change one of the main points of the PEC — which foresees a dribble in the spending ceiling, which prevents the growth of public spending above inflation. The government’s plan is to retroactively change the calculation of this limit, effectively increasing the margin for more expenditures at the end of 2021 and in 2022.

This change is one of the bases for Bolsonaro to be able to fulfill his promise to pay Brazil Aid of R$ 400 from December until the end of next year.

Bolsonaro determined, in October, the increase of Brazil Aid to R$ 400, triggering a crisis between the political and economic wings of the government.

The solution to meet the president’s demand was to circumvent the spending ceiling, proposing a change in the calculation of the fiscal rule in the PEC dos Precatórios. This PEC, which was already in the Chamber, provides for a limit for payment of court orders (debts of the Union recognized by the courts), which frees up more space in the Budget.

The two changes provided for in the PEC —involving the spending cap and court orders— have the potential to open a gap of more than R$ 90 billion next year, guaranteeing resources for Auxílio Brasil, aid for truck drivers and offsetting the increase in expenses related to the high of inflation.

The increase in spending in the social area is a bet by Bolsonaro and his allies to try to strengthen the president in the 2022 reelection race.

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bolsonaro governmentBrazil AidPEC of Precatórioprecatorypublic spendingsheetspending ceiling

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