TCU should pave the way for extension of emergency aid, but awaits government details

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The TCU (Court of Accounts of the Union) should open the way for the discussion on the extension of emergency aid, resumed by the government after the difficulties faced in Congress, to continue.

Among the members of the body, the first analyzes on the matter are that it is possible for the extension to be implemented — although it is necessary to wait for how the government will base the measure.

The need for a public calamity decree, discussed as a basis for the extension, is discarded by at least part of the TCU members.

The constitutional spending cap rule frees up extraordinary expenses for urgent and unpredictable cases—such as war, internal commotion, or public calamity. What exactly configures this scenario in the last two cases is still under discussion.

There are debates about the need for a legal instrument to support the public calamity, as was done in 2020, or whether it would be enough for the government to confirm that the country is going through a scenario of this type given the social and economic conditions of the population.

The national state of public calamity linked to the Covid-19 pandemic ended on December 31, 2020 and has not been renewed.

The finding of technicians from the Ministry of Economy is that the pandemic is cooling down and activity is returning.

The extension of emergency aid is studied after the government fails to implement a social program within the traditional Budget.

The Executive began to study dribbling options in the fiscal rules, but even so, it had new difficulties.

The obstacles have been seen in the processing of the PEC (proposed amendment to the Constitution) of the precatório, which circumvents fiscal rules.

The measure postpones the payment of court rulings, making room in the spending ceiling, and also expands the spending limit — which would make possible not only a new social program but other expenses of interest to the allied base (such as parliamentary amendments).

This Thursday (28), the National Treasury took a stand against a new public calamity decree – which could, depending on the format, completely suspend the fiscal rules for measures related to the pandemic or the social conditions of the population and, thus, freeing up large-scale expenses during an election year.

“There is no possibility for the economic team to defend the idea of ​​a new public calamity decree. The effects of the pandemic are getting smaller and dissipating,” said the Undersecretary of Strategic Planning for Fiscal Policy, David Rebelo Athayde.

According to him, last year the measure was justifiable given the demand for social distancing, which forced people to stay at home.

The public calamity decree gave rise to what was called the War Budget, a congressional allowance for spending outside fiscal rules that allowed $524 billion in extraordinary spending in 2020 — which also created the biggest hole in Treasury history.

“This was justified by the exceptional situation at that time, but in 2021 we are seeing a return to normality, with more than half of the population with two doses of vaccine and a very dynamic process of economic recovery,” he said.

“I don’t see any room for a public calamity decree to eventually defray further expenses. I think that would be out of the question,” Athayde said.

When asked about the possible extension of emergency aid, however, the Treasury was not emphatic and only recalled that today the Constitution requires requirements of unpredictability and urgency for extraordinary expenses to be released.

The hypothesis of a situation of public commotion or calamity in the country resulting from the economic situation was raised by former president Michel Temer (MDB) in an article published in sheet not Saturday (23).

He said there is always concern that the vulnerable might rebel, which in his view would support spending outside the spending ceiling rule.

The government and Congress have been discussing at least since August how to make payments to the most vulnerable by carrying out fiscal maneuvers — such as postponing the payment of debts demanded by the courts (precatório) and, more recently, expanding the spending ceiling.

The plans are devised after the Executive and Legislative no longer face spending cuts in other areas so that the values ​​of the weakest fit into the traditional budget without the need for dribbling in legislation.

The country already spends, not counting interest on debts, R$1.6 trillion per year.

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