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Bolsonaro wants to change Aid Brazil to avoid government collapse

Measure tried without success in 2021, the withdrawal of the Brazil aid of the spending ceiling can return to the agenda. According to Estadão/Broadcast, President Jair Bolsonaro and allies may propose this change in the fiscal rule for 2023. With opponents proposing the end of ceiling or even the change to expand public investments, Bolsonaro’s team believes that there are more favorable conditions for the measure. As shown by Estadão, the president demands space from the economic team for investments in achievements that can leave their mark in a second term, and Auxílio Brasil is his main bet for reelection.

As you convert the floor from BRL 400 of the permanent benefit was approved by the Chamber, last week, still pending a final vote in the Senate. But its impact has already been incorporated into the government’s 2023 accounts in the Budget Guidelines Law (LDO), which serves to guide the Budget. In 2022, Auxílio Brasil has a permanent part of R$ 224, with a cost of R$ 47.4 billion, and a temporary part, which in 2023 will be incorporated. With that, the total expense will be almost R$ 90 billion next year.

Technicians from the Ministry of Economy already privately anticipate that the amounts of discretionary expenses (non-mandatory for funding and investment) expected for 2023 (R$ 108.2 billion), 2024 (R$ 93.8 billion) and 2025 (R$ 76.7 billion) will be enough to run the government machine under normal conditions, without risk of collapse in the functioning of certain bodies most affected by the scarcity of resources at this level of expenditure.

For the executive director of the Independent Fiscal Institution (IFI), Daniel Couri, some type of compensation should occur because it is unlikely that the expense will not hit the 2023 spending ceiling. row. “Some expense will have to pay the bill”, evaluated Couri, who in a recent article published a proposal to reform the Budget. “There has to be a deeper reform even”, he pondered.

For former Treasury Secretary Jeferson Bittencourt, economist at ASA Investments, the spending ceiling, even with the highest “right foot”, is still imposing restrictions and ensuring a certain control over spending. “New expenses, mainly the maintenance of the complementation of Auxílio Brasil without cuts in other expenses and an eventual increase this year for servers will put at serious risk what is left of the rule”, he said. Bittencourt notes that the government took advantage of the pandemic to control the growth of personnel expenses and make institutional advances in the Fiscal Responsibility Law (LRF), such as preventing installment increases in salaries from being given with installments outside the mandate. “Without that, and with this pressure from the civil service, the end of the new spending ceiling would be decreed as of now,” he said. The information is from the newspaper O Estado de S. Paulo.

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