Joint statement mentions that amendments should not grow more than discretionary expenses; current level, however, is high
An important excerpt from the statement The three branches of government’s proposal for amendments has received little attention so far:
“It is agreed that the Executive and Legislative branches will adjust the issue of linking parliamentary amendments to net current revenue, so that they do not grow in proportion greater than the increase in total discretionary expenditure”.
The statement indicates a link between the amendments and discretionary spending (those who are not committed to salaries and other obligations).
If the agreement, to be announced in 10 days, does in fact make this connection, it will be the first institutional brake on the amendments since 2015, when they began to take up an increasingly larger space in spending.
The brake happens, however, at the time of greatest power of Congress over the allocation of resources. In other words, if the current proportion of spending by deputies and senators is maintained, they will retain the greatest power over the Budget that congressmen have ever had.
In 2014, amendments represented 0.1% of this expenditure. This year, they represented 24.2% up to July.
“The idea is good for several reasons: the volume of spending by parliamentarians would respect the limit imposed by fiscal conditions, and the gains observed in revenue would no longer lead to excessive spending,” says economist Felipe Salto, from Warren Investimentos.
There are still many questions about what the terms of the agreement will be. For example, would the limit on amendments be the current percentage? If discretionary spending falls, would amendments fall with it? How would it work with committee amendments?
Despite these many unknowns, if the Legislature follows the line of the announcement, there will be an unprecedented brake on the increase in amendments. The brake comes, however, at a time when Congress has the greatest power – which, after all, can be prevented from increasing the value of amendments, but it remains at a very high level.
Since the government of Dilma Rousseff began to have to give space to Congress, there was an increase in the share that congressmen have of discretionary spending.
By July of this year, R$29.8 billion in amendments had been paid. Total discretionary spending was R$123 billion, according to data compiled by Warren Investimentos. In other words, today, congressmen already determine the allocation of R$1 for every R$4 of these “free expenses”.
By the end of the year, the allocation for non-mandatory spending is R$196.6 billion. The allocation for amendments is R$49 billion. In other words, the ratio of R$1 for every R$4 in Congressional spending is maintained.
Marcos Mendesa researcher at Insper who is finalizing a study on amendments in OECD countries, says that there is no parallel in the world for these amendment expenses.
The United States, he says, is the country closest to Brazil in this type of spending. There, however, amendments amount to 1% of discretionary spending, says Mendes. In other words, Brazilian spending is close to being 24 times that of the US Congress.
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