Yet, lower house mulls requiring a fiscal rule; lawmakers also disagree with suggestion for new anchor to be introduced through complementary law

12/09/2022

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Alex Manente — Foto: Luis Macedo/Câmara dos Deputados

Approved by the Senate on Wednesday night, the Transition PEC (proposal to amend the Constitution) will begin to be negotiated only now by parties in the Chamber of Deputies. Members of the lower house complain that they were not consulted about changes made and that the proposal provides for a greater expense than expected, but that the deadline is short for changes.

Chamber Speaker Arthur Lira called on party leaders and deputies to begin discussions in Brasília on Monday, and the caucuses will meet Tuesday and Wednesday to debate and count the votes. One of the more criticized points, which could be potentially rejected, is the permission for the country’s new fiscal rule to be put in place by a complementary bill, which would repeal the spending cap.

The leader of Citizenship, Deputy Alex Manente, said he will advocate the need for passing a PEC instead. “If you do it by complementary bill, you can change it by majority vote. This causes instability,” he said. To approve a PEC, it is necessary the votes of 308 of the 513 deputies, while a complementary law requires the support of only 257. Sources say that Brazil Union and the Progressive Party (PP) are also concerned about this matter.

The PEC is expected to be voted on Wednesday night, after the resumption of a trial by the Federal Supreme Court (STF) that may consider unconstitutional the so-called rapporteur’s amendments, also known as the “secret budget.” This is a mechanism by which deputies and senators distribute money to their electoral bases without much transparency about whom the authors are.

The result of this process can cause problems in the vote because some lawmakers believe that President-elect Luiz Inácio Lula da Silva asked STF justices to block the secret budget. This forced Mr. Lula to call the Chamber speaker on Wednesday to deny the move. Messrs. Lula and Lira made an agreement at their first meeting that possible changes in these amendments would occur through political negotiation.

Valor heard four party leaders. They spoke on condition of anonymity because they want to hear other party members before taking a position. They said the vote is likely to take place on Wednesday, even if the Supreme Court trial is not over, and that there is little room to change the draft. At most, deputies will exclude provisions.

It is only possible to enact the parts of the PEC passed in both houses of Congress. If there are substantial changes, for example in the amounts, the proposal will have to be voted on again by the Senate. But the deadline is short, and the lawmakers intend to vote on the annual budget law for 2023 on December 19-21.

The lawmakers intend to reduce the amount of spending authorized by the PEC, which would total R$191.9 billion in 2023, the lower house’s budget consultants say. The figure includes R$145 billion of expansion of the spending cap, R$23 billion excluded from the cap for investments if there is surplus revenue, and R$23 billion of investments using funds from inactive accounts of the Workers’ Severance Fund (FGTS), which would be possible to do only once.

In addition, the proposal releases the spending of educational and scientific research institutions made with their own funds or agreements, investments made with funds from multilateral organizations or transfers from states and municipalities to the federal government, and socio-environmental projects carried out with money from donations. All of these items would be excluded from the spending cap.

Deputy Danilo Forte said the volume authorized by the Senate caught the deputies by surprise. “The PEC came much more hypertrophied than the debate was suggesting,” he said. “Everyone thought the Senate was going to restrain it and go along the lines of the proposals of Senators Tasso [Jereissati] and Alessandro Vieira, with an expenditure of a hundred and a few billion [reais].”

Deputies are also advocating the reduction of time authorized for this extra spending to one year from two. But, again, the short timeframe hinders this change. Leaders of parties allied with Mr. Lula, on the other hand, said that the significant score in the Senate, with a 64-13 vote, indicates that the situation with the parties would be more comfortable for voting in the lower house than previously expected.

*By Raphael Di Cunto, Marcelo Ribeiro — Brasília

Source: Valor International

https://valorinternational.globo.com/