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Government, Congress join forces in fiscal maneuver over spending cap

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The government and Congress have joined forces in a fiscal maneuver to release R$15 billion in spending this year and R$83 billion in 2022 to fund a set of measures that help the reelection of President Jair Bolsonaro and lawmakers, with a grant of R$400 to 17 million needy families, financial aid to truck drivers and public works in the electoral bases.The space for this will come with two measures approved Thursday by a Chamber committee: the non-payment of part of the court-ordered debts ("precatórios") and a change in the spending cap, which is currently the main fiscal anchor in the country.The decision came after days of negotiations among the political wing of the government, the main names of Congress and the economic team, which acted to contain damages in face of pressures to go over the spending cap (which prohibits the growth of the federal government’s current expenses above the inflation). The alternative found and formulated was to shift the inflation period for the cap to make more room for spending in the election.The reading is that the attacks on the spending cap have united all the ministers more involved in the political game and escalated their level. If before the situation was more restricted to the minister of Regional Development Rogério Marinho, a former assistant of Mr. Guedes, and to Labor minister Onyx Lorenzoni, now there is a great concert between Ciro Nogueira (Chief of Staff Office), Flavia Arruda (Secretary of Government) and Fábio Faria (Communications), who joined forces with Messrs. Marinho and Lorenzoni and found great support in Congress.The result led to the resignation of four secretaries from the Ministry of Economy: Special Treasury and Budget secretary Bruno Funchal, the National Treasury secretary Jeferson Bittencourt, and their respective deputy secretaries, Gildenora Dantas and Rafael Araujo.The ministry did not say who...

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