{"id":94546,"date":"2025-06-11T17:24:12","date_gmt":"2025-06-11T20:24:12","guid":{"rendered":"https:\/\/murray.adv.br\/?p=94546"},"modified":"2025-06-11T17:24:12","modified_gmt":"2025-06-11T20:24:12","slug":"fiscal-reform-bills-stalled-in-congress-despite-calls-for-spending-cuts","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/fiscal-reform-bills-stalled-in-congress-despite-calls-for-spending-cuts\/","title":{"rendered":"Fiscal reform bills stalled in Congress despite calls for spending cuts"},"content":{"rendered":"<section class=\"content--header\">\n<div class=\"row content-head non-featured \">\n<div class=\"medium-centered subtitle\">\n<h6 class=\"content-head__subtitle\" style=\"text-align: center\"><em><strong>Military pensions and cap on supersalaries among proposals left untouched<\/strong><\/em><\/h6>\n<\/div>\n<\/div>\n<div class=\"content__signa-share\">\n<div class=\"content__signature\">\n<div class=\"content-publication-data\">\n<div class=\"content-publication-data__text\">\n<div class=\"content-publication-data__from\"><\/div>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p class=\"content-publication-data__updated\">06\/11\/2025<\/p>\n<p class=\"content-publication-data__updated\"> At a time when Congress is pressing the executive branch to rein in public spending as an alternative to raising the Financial Transactions Tax (IOF), lawmakers themselves have yet to act on fiscal reform proposals already on the table\u2014such as the cap on public sector \u201csupersalaries,\u201d which has seen little progress.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"content__share-bar-container\">\n<div class=\"content__share-bar\">\n<div class=\"mc-column content-media__container\" data-image-display=\"normal\">\n<div class=\"content-media-container\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<div id=\"mc-article-body\" class=\"mc-article-body \">\n<article>\n<div class=\"no-paywall\">\n<div class=\"wall protected-content\">\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"63\" data-block-id=\"2\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Public finance experts interviewed by Valor argue that Congress could contribute meaningfully to Brazil\u2019s fiscal rebalancing by cutting back on parliamentary earmarks\u2014a move that would represent a concrete step toward spending restraint. This year\u2019s budget earmarks amount to R$50.5 billion, with an additional R$11.2 billion in discretionary executive expenditures added to compensate for unpaid transfers last year, bringing the total to R$61.7 billion.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"74\" data-block-id=\"3\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">In response, lawmakers have pledged to move forward with administrative reform, currently under discussion in the Chamber of Deputies and led by Federal Deputy Pedro Paulo (Social Democratic Party, PSD, Rio de Janeiro). However, several legislators caution that the bill is unlikely to emphasize cost-cutting. One influential leader of \u201cCentr\u00e3o\u201d bloc in Congress told Valor that reform proposals should originate from the executive branch, although contributions from the legislative working group may also emerge.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"8\" data-block-id=\"4\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\"><strong>Experts propose Congress take lead in trimming earmarks<\/strong><\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"58\" data-block-id=\"5\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">The bill to curb \u201csupersalaries\u201d\u2014by capping indemnity payments that push public servants\u2019 pay above the constitutional ceiling\u2014was passed by the Chamber in 2021 but remains stalled in the Senate. The deadlock stems from attempts to bundle it with the so-called \u201cquinquennial PEC,\u201d a constitutional amendment that restores a bonus for judges and exempts it from the salary cap.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"60\" data-block-id=\"6\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Similarly, lawmakers have kept their distance from another contentious issue: military pension reform, which the government submitted in December 2024. Six months on, the bill remains untouched in the Chamber, awaiting assignment of a rapporteur. The proposal sets a minimum retirement age of 55 for military personnel\u2014currently, there is no age requirement, and service members can retire after 35 years.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"70\" data-block-id=\"7\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">In 2023, military pension and retirement benefits posted a R$51.8 billion deficit, compared to R$304.6 billion for Brazil\u2019s general social security system (managed by the National Institute of Social Security, INSS). During the Agenda Brasil \u2013 the Brazilian fiscal outlook seminar hosted by Valor, CBN Radio, and O Globo, Chamber President Hugo Motta (Republicans of Para\u00edba) pledged to review the matter. \u201cWe\u2019ll do our part on this issue,\u201d he said.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"64\" data-block-id=\"8\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">A government-aligned senator told Valor that many cost-cutting bills are already pending in Congress, but meaningful progress would require reciprocal efforts from the executive. \u201cHow can we reduce spending if no one\u2019s willing to put in the effort?\u201d he asked. \u201cOnce we show effort here, they need to show it there too. No one wants to give ground because of the power dynamics involved.\u201d<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"72\" data-block-id=\"9\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Senate government leader Jaques Wagner (Workers\u2019 Party, PT, of Bahia) noted that lawmakers are also reluctant to budge. \u201cHugo [Motta] made a good point. Everyone knows adjustment is needed, but no one wants to concede an inch,\u201d he remarked. \u201cToday [Tuesday, 10] I attended the Economic Affairs Committee (CAE) to follow debate on raising the physician salary floor. Everyone talks fiscal responsibility, then backs something that could cost R$40 billion,\u201d he criticized.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"102\" data-block-id=\"10\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Senator Efraim Filho (Para\u00edba), a leader of Brazil Union and chair of the Joint Budget Committee (CMO), said the government faces an uphill battle in passing its provisional measure offering alternatives to an IOF hike, especially if it only includes tax increases. \u201cThe government hasn\u2019t really proposed spending cuts. It&#8217;s switching to revenue methods that cause less noise, but that\u2019s not going over well,\u201d he said. \u201cThe government has to negotiate with its own base to see what they\u2019re willing to back. You can\u2019t mention Fundeb [Basic education fund] or BPC [continuous cash benefit] without the PT jumping out of their seats.\u201d<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"38\" data-block-id=\"11\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">On another front, experts argue that cuts to parliamentary earmarks would send a strong message. While they believe the mechanism should be retained, they call for reforms to curb what they see as distortions in the budget process.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"34\" data-block-id=\"12\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Last month, amid the IOF debate, Mr. Motta said congressional leaders were not \u201cconcerned\u201d about reducing earmarks. He noted potential support for a cap\u2014if it applies to all parties equally\u2014but warned against \u201ccriminalizing\u201d earmarks.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"42\" data-block-id=\"13\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">On Monday (9), after attending the Agenda Brasil seminar in S\u00e3o Paulo, Congressman Luciano Zucco (Liberal Party, PL, Rio Grande do Sul), leader of the opposition in the Chamber, also acknowledged the possibility of cutting earmarks, saying \u201cCongress could lead by example.\u201d<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"54\" data-block-id=\"14\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Political scientist Beatriz Rey, affiliated with the University of S\u00e3o Paulo (USP) and the Popvox Foundation, said Congress gained political power with the increase in earmarks but is not being held accountable for its share of fiscal responsibility. \u201cThe Faria Lima [financial market] crowd needs to start demanding fiscal discipline from Congress,\u201d she said.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"40\" data-block-id=\"15\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">\u201cBetween 2015 and 2024, earmarks jumped from R$3.9 billion to R$48.3 billion. That\u2019s an absurd increase, disproportionate to Congress\u2019 role in the budget, encroaching on the executive\u2019s prerogatives,\u201d Ms. Rey added. She also called for Judiciary involvement in ending \u201csupersalaries.\u201d<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"43\" data-block-id=\"16\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">\u201cCongress needs to contribute directly by cutting earmarks,\u201d said Felipe Salto, chief economist at Warren Investimentos. He supports a 50% cut starting in 2026. \u201cThen we could consider a rule that makes earmarks, like other expenditures, subject to available fiscal space,\u201d he suggested.<\/p>\n<\/div>\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"40\" data-block-id=\"17\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">\u201cWe\u2019re on the brink of a fiscal crisis. The situation is dire. Spending is outpacing revenue, partly because earmarks have become a new, virtually untouchable mandatory expense,\u201d said Mr. Salto, former executive director of the Senate\u2019s Independent Fiscal Institution (IFI).<\/p>\n<\/div>\n<div data-track-category=\"multicontent\" data-track-action=\"ultimo chunk conteudo\" data-track-noninteraction=\"false\" data-track-scroll=\"view\">\n<div class=\"mc-column content-text active-extra-styles \" data-block-type=\"unstyled\" data-block-weight=\"47\" data-block-id=\"18\">\n<p class=\" content-text__container \" data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Mr. Salto credited Finance Minister Fernando Haddad with making \u201ca significant effort\u201d to meet the fiscal target, while accusing Congress of \u201cwavering.\u201d He believes the IOF controversy is a chance for Congress and the executive to jointly define a list of measures to clean up public finances.<\/p>\n<p data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">*By\u00a0Andrea Jub\u00e9,\u00a0Gabriela Guido,\u00a0Joelmir Tavares\u00a0and\u00a0Beatriz Roscoe\u00a0\u2014 Bras\u00edlia and S\u00e3o Paulo<\/p>\n<p data-track-category=\"Link no Texto\" data-track-links=\"\" data-mrf-recirculation=\"Article links\">Source: Valor International<\/p>\n<p>https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Military pensions and cap on supersalaries among proposals left untouched &nbsp; &nbsp; &nbsp; &nbsp; 06\/11\/2025 At a time when Congress is pressing the executive branch to rein in public spending as an alternative to raising the Financial Transactions Tax (IOF), lawmakers themselves have yet to act on fiscal reform proposals already on the table\u2014such as [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[26172,26174,26173],"class_list":["post-94546","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-fiscal-reform-bills","tag-spending-cuts","tag-stalled-in-congress"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - 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