Opinion: Auxílio Brasil is an improvised Election Scholarship and puts the future of the program at risk

There was great confusion with the publication of an extraordinary official diary on Friday night (5): Bolsonaro government readjusted the Bolsa Família Program.

It’s worth trying to explain this scam further.

After three years of emptying Bolsa Família, Bolsonaro published in August an MP-1061 with a project (Auxílio Brasil) that was poorly designed, unsustainable and without a source of funding. At one stroke it hurt the LRF, the CF/88, the electoral law and common sense, and put 39 million families among the poorest at risk.

It achieved a feat: Bolsa Família was finally recognized and acclaimed by 10 out of 10 economists of all stripes and by a wide range of columnists. Posthumous recognition, as is customary with our heroes and heroines who are not in the picture.

In addition to being ineffective, the proposal lacked two basic solutions:

Then the improvisation begins. Without any study or basic bakery account, they defined a strategy of dividing an Election Scholarship into two pieces.

A dehydrated PAB (Program Auxílio Brasil) that would fit into the annual budget law and would have a supposedly permanent framework, without any increase in relation to the Bolsa Família values. And a provisional amount that would depend on the PEC dos Precatório and that would complement the PAB up to the promised BRL 400, which would be paid to 17 million families.

But even this dehydrated PAB does not stand still, as it does not fit the LRF’s continued expenditure expansion rule, which requires compensation through increased revenue or reduced expenditure. To get around the rule, the government expanded the values ​​of Bolsa Família, in order to make it appear that the Auxílio Brasil does not represent an expansion of expenses.

It is notoriously silly to use the expansion of Bolsa Família as a space for Auxílio Brasil, especially since they did not pay for any month of the Bolsa Família Program expanded with the new amounts. The expansion lasted less than 48 hours and was not even completed.

Then, on 11/09/2021, in the wake of the alleged legalization by the “fake expansion” of the Bolsa Família Program, a decree was published defining the amounts for Brazil Aid in an arrival account, 3 months after MP 1061 was sent to National Congress. The maneuver reinforces the general feeling of opportunism and improvisation.

With the new values, the extreme poverty line goes from R$89 to the smallest R$100. They didn’t even try to reach the now obsolete benchmark of US$1.25 a day (R$126 monthly) of the Millennium Development Goals. Currently, the extreme poverty line for developing countries would be at least US$1.9 in purchasing power parity (R$172 monthly). According to a recent study published by the World Bank, the extreme poverty line in Brazil should be around R$300.

In turn, the average benefit of the Auxílio Brasil Program goes from R$189 to R$217 per family. Considering that on average there are 3 people in the Bolsa Família Program families, this amount is equivalent to R$2.4 per person per day.

The government’s proposal is absurd in every way. It is mistaken in merit, as the design of the project is bureaucratic, complex and disruptive, generating diseconomies, and it is unsustainable because, to circumvent basic public finance rules, it leads to a program whose additional values ​​expire in December 2022, creating the concrete possibility of reducing the income of the most vulnerable.

This scenario is even more likely given the fact that the new formula for calculating the spending ceiling, proposed by PEC 23/2021, symptomatically expands the fiscal space in 2022, but reduces the expenditure limit by approximately R$ 20 billion in 2023. The situation may worsen in view of the default on court orders, which will increase the government’s liabilities for the next few years, with a strong risk that the Federal Supreme Court will determine overdue payments.

In addition, Auxílio Brasil sacrifices 20 million families that had been receiving Emergency Aid and that will be abruptly excluded without even guidance for the transition towards chaos.

This improvisation by Bolsonaro explained what we had already been saying: the readjustment of the Bolsa Família Program is possible, safe, functional and the only solution that lasts beyond the elections.

In the face of an income blackout amid the terrible situation of hunger and poverty, the safest thing would be:

But none of that will happen. After all, Auxílio Brasil does not intend to mitigate the social chaos created by the Bolsonaro government, but rather constitutes yet another instrument for the destruction of the institutional bases of social protection in Brazil, the central objective of the authoritarian project in progress.