Alternative proposals in Senate will force Lula’s team to negotiate
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...
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