Leave things as they are to see what happens
After the big confusion caused by government and political leaders regarding the idea to finance a federal cash-transfer program by limiting writs of payment known as "precatórios," the economic team now plans to "leave things as they are to see what happens," a high-ranking source summed up.
The reason is President Jair Bolsonaro is focused on this year's municipal elections and has the political goal to overcome former President Luiz Inácio Lula da Silva's prestige in the Northeast region. After the elections, the government will discuss again Renda Cidadã, the cash-transfer program it wants to create to have its own mark, aides to Economy Minister Paulo Guedes say.
On Wednesday, the minister threw cold water on the proposal to fund the social program with money saved by not honoring court-ordered payments. The idea of defaulting debts with creditors of the state, as announced Monday in a press conference at Alvorada Palace, the president's official residence, sounded more like a thick smokescreen than a real solution for the new income program. The market reacted badly and the idea's father disappeared.
Economy officials are not interested in making any decision pressed by the electoral campaign. After this political issue is solved, Mr. Guedes is expected to revisit the original proposal of Renda Brasil, which was supposed to be created by merging 27 social programs, including salary allowance, Bolsa Família and continuous cash benefit.
Yet the plan fails to gather sufficient funds to finance 14 million families that currently receive Bolsa Família plus 20 million people selected among 60 million Brazilians now receiving the emergency aid the federal government started to pay during the pandemic to informal workers. The idea is to ensure a monthly income around R$300.
By the way, there is a debate on a social program whose design, strictly speaking, no one knows nor have read one line of. The Economy minister says the details of Renda Brasil or Renda Cidadã are in the hands of Citizenship Minister Onyx Lorenzoni. Basic information on the target audience, how many people will receive a minimum income and how much that will cost to the National Treasury is unknown.
Mr. Guedes's proposal is to increase funds for Renda Brasil with R$40 billion more to be taken from the middle class that files income tax return and takes advantage of deductions of expenses with health and education, a benefit now expected to be eliminated. Regarding taxes to...
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