Suspending the rapporteur’s amendments threatens contracts on Social Security data, says INSS

The suspension of the execution of funds linked to the rapporteur’s amendments does not only affect the negotiations between the Jair Bolsonaro government (no party) and Congress.

In official letters sent to the Ministry of Economy, the INSS (National Social Security Institute) pointed out that it may fail to comply with strategic action contracts, such as those of Dataprev, a public company that maintains the entire Social Security database.

This impact occurs because R$350 million in funds from the rapporteur’s amendments were incorporated into the institute’s budget to cover discretionary expenses, such as contracting services.​

In other ministries, funds are applied mainly to agreements and works.

The execution of these amendments, called RP9, has been suspended since the 5th by decision of the STF (Supreme Federal Court).

Reporter on the case, Minister Rosa Weber argues that there is no transparency in the transfer of these funds, which would violate constitutional principles of “legality, impersonality, morality, publicity and efficiency”.

Rosa’s decision was followed by seven of the court’s ten current ministers. Only two voted against.

The institute told the sheet that there is no risk of interrupting payments or services.

The INSS estimated to the Ministry of Economy that it will have a loss of R$ 95.7 million with the STF’s decision, as it had already scheduled the execution of a series of expenses, “which will bring major problems in the work to close this budget year” .

The president of the Institute, José Carlos Oliveira, asked the team of minister Paulo Guedes for “urgency in the analysis and adoption of measures”, according to official letters signed on the 9th and obtained by sheet. “In view of the serious damage that the suspension in question will cause to this institute,” Oliveira said.

In a technical note also sent to the Economy, the INSS said that it has already requested additional credit to comply with its contracts and that the suspension of the rapporteur’s amendments aggravates payment difficulties.

“This general picture, more than pointing to the impacts on contract fulfillment, explains the negative repercussion on the autarchy’s ability to fulfill its public role of serving the millions of Brazilians to whom the agency provides services and who, ultimately, are also the legitimate supporters of the General Social Security System Fund [FRGPS]”, said the institute.

The agency pointed out that it may not pay Dataprev, a company “responsible for processing expenses with social security benefits of the FRGPS, and which generates payment to social security customers”.

The institute told the Guedes portfolio that it will cut transfers of expenses with the Pasep (Program for the Formation of Public Servant Heritage) and contracts with the Post Office, in case the funds remain blocked.

The agency also sees difficulties in reallocating resources between its budgetary actions to meet the expenses of administrative units. This is because the STF decision would prevent the 2021 Budget General Rapporteur, senator Márcio Bittar (PSL-AC), from signing this transfer of funds.

In a note sent to sheet, the INSS adopted a different tone from that presented to the ministry. He said that the institute’s “financial difficulty” “has nothing to do with what happens at the STF”.

The institute pointed out that it needs R$300 million to close the budget by the end of 2021.

“The financial resources to guarantee the maintenance of all the activities of the agency are already being sought and negotiated with the responsible entities (in this case, the Federal Budget Secretariat). This should be agreed upon at the next meeting with the Budget Execution Board”, stated the INSS, in a note.

The agency also stated that it has never stopped serving the public or suspending services. “There is no reason for this to happen now.”

These RP9 amendments have been handled by government officials with the support of the Planalto Palace on the eve of important votes for the Executive.

In 2020, around R$ 20 billion were set aside for expenditures that are indicated by the General Rapporteur for the Budget, after political negotiations. The value for 2021 is BRL 16.85 billion, of which BRL 9.31 billion were committed until the decision of the Supreme Court.

But in the seams of the Budget, a part of the resources ends up being applied to the ordinary expenses of agencies or in actions that do not meet the specific interest of a congressman.

In 2020, for example, Fiocruz received R$ 260 million from the rapporteur’s amendments for actions to combat Covid-19.​

The INSS has already committed BRL 316 million from the authorized sums for the rapporteur’s amendment and paid BRL 245.26 million. In other words, the agency still has credit that it wants to use to close the year’s accounts.

Asked about the suspension of the amendments and the INSS alert, the Ministry of Economy said that it still depends on a final decision by the STF to “express its opinion on its potential impacts”.

The STF decision endorsed an injunction (provisional decision). The merits of the action against the rapporteur’s amendments has not yet been analyzed by the court.

According to Legislative technicians, Congress could reallocate the resources that are currently reserved for amendments by the rapporteur. That way the budget wouldn’t stay put.

The strategy being discussed in Congress after the STF decision is to allocate this money to another classification within the Budget, such as the so-called RP2, government expenditure code.

The vice president of the Chamber, Marcelo Ramos (PL-AM), assessed that, at first, the suspension would not strengthen the government.

“Like the RP9 [código de emenda de relator] is suspended, it will remain in a vacuum. Now, if you end up with RP9, then everything goes to RP2 [código de despesa discricionária do governo], and strengthens the government,” he said.

When transferred to the discretionary expense code, the amendment budget enters the same accounting as expenses for the functioning of the public machine. With that, the value negotiated with parliamentarians will not even be made public.

The executive director of the IFI (Independent Fiscal Institution), Felipe Salto, said that the decision could end up giving even less transparency to the amendments negotiations.

“Today we don’t know which congressman originated that amendment. How much was released? We don’t know. What could happen is for Congress to transform all this into RP2. It will get even worse.”