In an electoral climate, Congress approves fiscal bomb without resistance from the Planalto

In an electoral climate, the National Congress stepped on the accelerator of goodness and approved, with the support of the government base, a fiscal bomb, given its potential billionaire impact on the accounts of the Union, states and municipalities.

In a single day, the Chamber approved a minimum wage of R$4,750 for the nursing sector, while the Senate approved a proposal that establishes a minimum wage of two minimum wages (that is, R$2,424) for community health workers.

Now, parliamentarians are discussing other initiatives with an impact on public accounts, such as the renegotiation for debtors of the Union and even the withdrawal of Auxílio Brasil from the spending ceiling.

Despite contradicting the position of the economic team, the approval of the proposals did not face resistance from the Planalto Palace. With no explicit opposition from the government of Jair Bolsonaro (PL), the allied parliamentarians strongly supported both measures, also avoiding attrition towards their voters.

The fight now is to decide who will pay the bill. as showed the Sheetthe nursing floor alone has an impact estimated by the National Treasury at R$ 7 billion, in the case of public hospitals, and R$ 8 billion in the case of philanthropic entities (many of which receive funds from the public sector), reaching R$ 22 billion if including the private sector.

Industry estimates, in turn, point to a lower total impact, of R$ 16.3 billion to fund the nursing floor. Whatever the cost, part of it falls into the coffers of states and municipalities — which, in turn, want federal support to pay the additional bill. In the private sector, the fear is of an increase in the number of layoffs.

Another R$ 3.7 billion would be needed to pay the floor for community health agents, but the amendment itself threw the bill into the lap of the Union. As it is a PEC (proposed amendment to the Constitution), the text is not submitted to the scrutiny of the President of the Republic and has already been enacted by Congress.

The nurses’ floor will be the subject of a veto recommendation by the Ministry of Economy.

The rapporteur for the nursing floor, deputy Carmen Zanotto (Citizenship-SC), said that a meeting with government representatives is scheduled for next Tuesday (10). The expectation is to reach a consensus on how to finance the new nursing floor, avoiding the veto.

“We are working in search of a source of funds, because the situation could not remain as it was. It is nursing that assists the population 24 hours a day. How do I have a nursing technician earning R$ 1,200 with 40 hours in this country , taking care of five infusion pumps, with diluted medication?”, questioned the parliamentarian.

There are several ideas to allocate resources from oil royalties, state dividends or funds stopped in government funds, in addition to the revenue from the eventual release of gambling – already approved in the House. However, none of the solutions solves the obstacle imposed by the spending ceiling, which is completely occupied by the federal government’s expenses.

The parliamentarian does not officially confirm, but interlocutors point out that she met with the president of the CCJ (Constitution and Justice Commission) of the Senate, Davi Alcolumbre (União Brasil-AP), to discuss the release of the games, seen as the most viable option for finance the floor in future years.

Economic team cheers for the arrival of June parties to contain Congress

Minister Paulo Guedes’ team (Economy) had been warning of the fiscal risk of creating salary floors, but the conversations had no effect and now the team fears that there will be a new onslaught on the spending ceiling.

The avalanche of projects with strong popular appeal, but undesirable from a fiscal point of view, has increased the feeling of support in the economic team for the arrival of the June festivals.

During the period, congressmen return to their bases, and voting is practically paralyzed – which would staunch the pressure on the government’s coffers.

The government’s situation is more complicated in the Senate, where Palácio do Planalto has been without a designated leader for five months. Senator Carlos Viana (PL-MG) has been acting on behalf of the government informally, but he also needs to share his time with his pre-candidacy for the government of Minas Gerais.

Until the legislative recess, however, congressmen are already preparing a new sequence of projects with an impact on the accounts.

Lawmakers want to unlock a broad program to renegotiate tax debts for large companies, even if it initially means taking a step back.

The measure has already been approved by senators, but did not advance in the Chamber amid the government’s accusation that the measure could cause losses of more than R$90 billion in 2022 with discounts on fines and interest.

The deputies, in turn, complain that the Senate buried the project to change income tax rules. Therefore, there is an articulation to include an abbreviated version of Refis in the IR project to be processed jointly in the Senate, pleasing both Houses.

Senate President Rodrigo Pacheco (PSD-MG) stated that he was initially opposed to unification, but later showed himself open to the alternative.

“They are two different things, two different legislative instruments. But nothing prevents a construction from taking place. Now, regardless of the path, a House or Senate project, for me I consider it important to have the approval of a program of re-parceling and renegotiation of tax debts such as Refis because companies have experienced an unprecedented crisis in Brazil and need to be rescued”, he said.

Chamber tries to suspend electricity bill increases in election year

The Chamber also approved the urgency of a draft legislative decree to suspend increases in energy tariffs approved by Aneel (National Electric Energy Agency), many of them close to 20%.

The idea is to postpone the impact to 2023, avoiding repercussions on consumers’ pockets in an election year. The proposal was presented by deputy Domingos Neto (PSD-CE) under the argument of preventing the electricity bill from being “the great villain of inflation”.

After a 10.06% rise in prices last year — the biggest since 2015, under Dilma Rousseff (PT) — inflation forecast by economists is at 7.89% for 2022, the year in which Bolsonaro seeks reelection. Deputies and a third of the Federal Senate will also try for new terms.

At the same time, the new rapporteur for the 2023 Budget, Senator Marcelo Castro (MDB-PI), defended the withdrawal of the Auxílio Brasil program from the spending ceiling.

“I would be in favor,” he said. “At a time like this you need to define priorities and our priority at the moment, post-pandemic, is to save lives, give dignity to people and we cannot escape this responsibility.”

According to Castro, although there is no concrete proposal on the subject, such an exception could “save lives”.

Corporate agendas take advantage of government weakness and interest in popularity, says researcher

Researcher Bruno Carazza, a professor at Fundação Dom Cabral, says that the Bolsonaro government has routinely abdicated its leading role in the legislative agenda, leaving it in the hands of congressmen to decide which projects are priority or not. For him, this option of “letting things go more freely” allows for a certain extrapolation in the approved measures.

In addition, the electoral factor plays a role in side-by-side negotiations. Carazza recalls that Bolsonaro is in second place in polls and has a high rejection rate.

“This can make Bolsonaro more vulnerable to these agendas, which are also corporate agendas, which take advantage of this moment of fragility and at the same time the government’s interest in regaining popularity”, he evaluates.

The problem, according to the professor, is that the approved proposals hire a large expense for the future. “We are buying into a very complicated fiscal and economic situation for the next few years, whoever the president-elect is,” he says.