Lawmakers are expected to vote on the new rule in at least two weeks
Omar Aziz — Foto: Lula Marques/ Agência Brasil
The plenary of the Senate on Wednesday passed the bill of the new fiscal framework by a 57-17 vote. The matter will return to the Chamber of Deputies for deputies to analyze the amendments made by senators before the presidential sanction. Due to a local celebration (June Festival) and Chamber Speaker Arthur Lira’s trip to Portugal, the vote on the new rule will take place at least two weeks from now.
The main change was proposed in an amendment by the leader of the government in Congress, Senator Randolfe Rodrigues, to avoid cutting $32 billion in the Annual Budget Bill (PLOA) 2024. These R$32 billion are the difference between the government’s original bill, which considered the inflation until December to correct the expenditure floor, and the proposal approved by the lower house, which makes the calculation based on the inflation of the 12-month period through June.
Mr. Rodrigues argued that the amendment is necessary to “guarantee investments in highways and sanitation, in addition to current expenses such as issuance of passports and operation of the National Institute of Social Security (INSS) and welfare services,” such as the cash-transfer program Bolsa Família and pensions. Planning and Budget Minister Simone Tebet attended the plenary session to ask the senators to pass the amendment.
The bill’s rapporteur, Senator Omar Aziz, had initially rejected the amendment but changed his mind after appeals from Mr. Rodrigues and Senator Weverton Rocha. “But you have to explain what is happening. No wonder it is not included in the lower house vote,” he said, adding that Finance Minister Fernando Haddad did not request the amendment and that the proposal could turn against the government itself if there is not the expected rise in inflation because then it will be necessary to cut expenditures.
In the justification of the amendment, Mr. Rodrigues said that this risk exists only if inflation at the end of the year remains below 4%, the rate measured in the last 12 months, “which is not foreseen by any economic agent.” The proposal accepted by the senators, including those of the opposition, says that the “conditioned” expenses will appear in the PLOA, but will depend on this increase in inflation in the comparison between June and December. This change must be confirmed by deputies in July.
The deputies will also have to evaluate other changes made by the senators that were already included in the text approved Wednesday morning in the Economic Affairs Committee (CAE). The Senate decided to exempt from the expenditure control rule the Constitutional Fund of the Federal District (FCDF), the Fund for Maintenance and Development of Elementary Education (Fundeb), and spending on science, technology, and innovation.
Mr. Aziz also accepted a last-minute amendment to the CAE that includes “the sale of assets and privatization of state-owned companies” among the possible measures to adjust public accounts. According to Senator Oriovisto Guimarães, 187 state-owned companies could be used to reduce the debt.
*Por Caetano Tonet, Raphael Di Cunto, Estevão Taiar — Brasília
Source: Valor International