The government fails to obtain votes to approve the PEC of the fiscal package and Lira postpones the vote until Thursday

The government fails to obtain votes to approve the PEC of the fiscal package and Lira postpones the vote until Thursday


Allied grassroots lawmakers oppose spending cuts and express dissatisfaction with Haddad

BRASILIA- After seeing the cost reduction package dehydratedthe Lula government did not obtain the votes to approve this Wednesday 18th the Proposal for Amendment to the Constitution (PEC) which integrates all the fiscal adjustment measures.

The President of the Chamber, Arthur Lira (PP-AL), postponed the vote on the proposal to Thursday 19th, to avoid a defeat for the Palácio do Planalto and the Minister of Finance, Fernando Haddad.

Federal deputies approved a draft package, with new stimuli to strengthen the fiscal frameworkBut quashed the government’s attempt to cut mandatory parliamentary amendments to cover mandatory spending and meet the spending limit.

The second proposal to vote on would be the PEC, which provides for changes to the art salary bonusIn National Education Development Fund (Fundeb) and us public service super wages.

At 11.30 pm the deputies voted on a regulatory proposal which gave preference to the PEC vote. The proposal was approved with 294 votes against 172. It was found that the number of votes in favour, however, would not be sufficient to approve the content of the PEC, which requires 308 deputies in favour, given that it is a PEC – which led Lira to postpone the vote to spare the government defeat.

The deputies of the allied base voted against the proposal, making it clear behind the scenes that they were dissatisfied with Minister Fernando Haddad and against the adjustment proposed by the economic team. The 12 PSOL deputies present at the session and two others from the PT voted against. If they had voted in favor, the proposal would have passed.

The government will try to vote on the PEC again this Thursday, in a session scheduled for 10am. The Palácio do Planalto still has a third draft fiscal package to discuss, and this is the most controversial, since it involves changes to the Continuous Payment (BPC) benefit – which have already been de-emphasized in the project report compared to the government’s original proposal.

Congress has only this week to analyze the package later this year, then it will go into recess. Surprised by the result of the vote, the head of government in the Chamber, MP José Guimarães (PT-CE), spoke briefly to journalists after the session and signaled that the Senate could meet on Saturday to finalize the approval of the package.

“There is no longer a session of Congress, we have the whole day to conclude; there should only be one highlight of the PEC, we will vote tomorrow. Let’s finish the PEC and move on to the PL. It’s night for the Senate”. (from Thursday)is on Friday, the Senate says it will be able to hold a session until Saturday. We were scheduled for 10am (from tomorrow). No risk of fear. Tomorrow we will approve the PEC. (The votes) are sufficient, tomorrow we will approve the PEC and the PL”, he said.

Change at Fundeb

The main change to the PEC text, reported by MP Moses Rodrigues (União-CE), was the modification of the government’s proposal in relation to the Fund for the maintenance and development of basic education and the development of education professionals (Fundeb). The Treasury wanted up to 20% of the resources that the Union invests in the fund to be allocated to full-time education, which could open up fiscal space of R$11.6 billion next year.

The rapporteur reduced the percentage to 10% and established that additional Union funds to Fundeb will be used for full-time education only in 2025, reducing the impact to R$4.8 billion. This value, however, already corresponded to the savings announced by the government when it announced the tax package.

With the proposal, starting from 2026, states and municipalities will have to allocate 4% of their resources that they place in Fundeb for this program. In practice, the Union shifts responsibility to local governments and thus hopes to save resources.

According to economist Camillo Bassi, researcher at the Institute for Applied Economic Research (IPEA), states and municipalities will have to invest 12 billion reais in full-time education in 2026 to comply with the rule contained in the approved proposal. “The value corresponds to the previous proposal, but the origin of the resource is different. From 2026 the resource will be calculated based on the funds of all states and the Union will be unaware of it.”

Effective cost savings for the Union, however, will require the federal government to reduce education budget resources by the same amount. In cutting resources, the federal government must assume the political burden and still meet the constitutional minimum for education required by the Constitution, which consumes non-mandatory expenditure.

The space in the savings generated by Fundeb could be taken up by other expenses, such as the Pé-de-Meia programwhich pays a scholarship to high school students. In this way there would not be a cut in total expenses, but the nest egg would be brought into the budget, avoiding fiscal maneuvers.

Other measures

The speaker maintained his constitutional mandate to try to fight back super salaries public service, but defining that an ordinary law, and no longer a complementary law, will say which types of frills can be excluded from the salary cap. In practice, ordinary law requires fewer votes for approval.

The PEC also defines what you will be entitled to salary bonus for those earning up to 1.5 minimum wagebut with a transition rule. Today, anyone earning up to two minimum wages is entitled to the benefit, but this benefit will gradually decline until at least 2035.

The proposal also extends the release of Union revenue (DRU) until 2032. The text has instead eliminated the repeal of the paragraphs that forced the government to implement the Budget approved by the National Congress.

Source: Terra

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