Senator Tasso Jereissati will file a proposal to amend the Constitution suggesting a way to ensure monthly payments for cash-transfer program
Tasso Jereissati — Foto: André Coelho/Valor
Senator Tasso Jereissati will file a proposal to amend the Constitution (PEC) suggesting an alternative way to ensure monthly payments of R$600 for the cash-transfer program Bolsa Família (current Auxílio Brasil) in 2023. Mr. Jereissati’s idea is to increase the budget limit foreseen for next year by R$80 billion, an amount that would definitively expand the basis for calculating the spending cap the following years.
This is the second proposal that has emerged in recent days as an alternative to the blueprint prepared by the Worker’s Party’s (PT) transition team, providing R$198 billion in expenses outside the spending cap next year. The first was unveiled last Saturday by another PSDB senator, Alessandro Vieira, of Sergipe, and proposes to exclude R$70 billion from the spending cap for extra spending in 2023.
The emergence of yet another proposal reinforces the expectation that the transition team will have to negotiate. In the view of public accounts experts and some members of Congress, R$198 billion is an exaggerated amount to leave outside the cap, just as they criticize the idea of removing Bolsa Família from the spending limit for good.
Mr. Jereissati argues that with more R$80 billion the new administration can both adjust the value of Bolsa Família and expand spending in important areas such as health, education, science, technology and culture, including a real increase in the minimum wage. This bill is criticized, however, by Workers’ Party senators. They say that R$80 billion would be enough just to guarantee the value of the Bolsa Família at R$600 and an additional payment of R$150 per child up to six years old.
According to former Finance Minister Nelson Barbosa, a member of the presidential transition team, the new administration is able to expand the 2023 budget by up to R$136 billion, even outside the spending cap, without generating fiscal expansion.
The debate about fiscal expansion is not directly related to the spending cap, which is being discussed in the Transition proposal to amend the constitution, the so-called Transition PEC.
According to Mr. Barbosa, the federal administration’s primary expenses are expected to end this year at nearly 19% of GDP, while the 2023 budget bill foresees primary expenses at 17.6% of GDP. The R$136 billion, in this case, would correspond to a difference of nearly 1.4 percentage points of GDP.
Given these numbers, he considered insufficient the R$70 billion of additional spending to be provided by the alternative PEC filed by Senator Alessandro Vieira.
Mr. Barbosa made these statements at the Centro Cultural Banco do Brasil (CCBB), where Mr. Lula’s transition team is working.
At the same place, the vice-president of the Worker’s Party and reelected federal deputy José Guimarães said that the expenses included in the Transition PEC represent an attempt to define spending “as low as possible.” In other words, he suggested that a lower amount than the one proposed by the elected government would not be enough to meet social demands.
Another member of the transition team, Senator Randolfe Rodrigues said that the blueprint of the PEC may be presented this Tuesday. According to the senator, the blueprint is expected to provide the exclusion of the cash-transfer program from the spending cap for four years. The deadline was defended by Mr. Guimarães and by the Workers’ Party’s head, Gleisi Hoffmann.
Mr. Rodrigues also said that the counterparts to ensure fiscal balance may come in the same text of the PEC or the medium term.
A member of the regional development technical group, the senator said he received the data with an “alarming scenario” from the current administration. Last year, R$700 million was spent on Civil Defense actions, he said. For 2023, only R$120 million were set aside.
There was also a distortion, in the senator’s opinion, in the allocation of funds. “In 2018, 19% of regional development funds were allocated from parliamentary amendments, in 2022 this represents 64%,” he said, criticizing the system of rapporteur amendments, also called the secret budget.
Mr. Guimarães also said that the inclusion of the rapporteur’s amendments in the PEC “was never” discussed with the Chamber of Deputies Speaker Arthur Lira.
“This issue was never part of our talks,” he told reporters after being asked if this possibility, raised by Deputy Ricardo Barros, could help the PEC to move forward in Congress.
According to Federal Deputy Guimarães, “there is a great spirit of goodwill to approve the PEC.” “Everything has to be negotiated, nobody can impose it,” he said. He also said that from now until next Wednesday, the PEC negotiation will be “unlocked.”
While the political group discusses the PEC that will enable the payment of R$600 for Bolsa Família, the economic team analyzes several proposals for the new fiscal rule. Mr. Barbosa said that the transition team will present a recommendation on the topic in mid-December.
In the former minister’s opinion, the suggestions presented so far converge on the importance of establishing a sustainable debt trajectory as a relevant concept.
He also stated that there is a “reasonable consensus” in the transition team regarding the importance of a tax proposal that implements a value-added tax. According to him, Congress seems to have converged towards the adoption of the dual VAT, that is, a federal tax and another state tax. That is how it is described in PEC 110 report.
“This is a theme to be matured and approved in 2023 to be in effect as of 2024,” he added.
The same calendar applies to Income Tax reform, which, in his opinion, is not mature. Thus, he believes that there will be plenty of time to seek an agreement on the collection of income tax on dividend distributions.
*By Renan Truffi, Vandson Lima, Anaïs Fernandes, Estevão Taiar, Lu Aiko Otta, Caetano Tonet, Matheus Schuch — Brasília
Source: Valor International