The Chamber concluded, this Wednesday (21.Dec.2022), the vote on the basic text of the PEC (proposed amendment to the Constitution) that authorizes the president-elect, Luiz Inacio Lula da Silva (PT), breaking the spending ceiling by around BRL 170 billion to fulfill campaign promises.
The main one is to maintain the payment of the Auxílio Brasil of BRL 600 –which, through a bill, may once again be called Bolsa Família– and of BRL 150 for beneficiary families with children up to 6 years old. in 2023.
In his opinion, the rapporteur Elmar Nascimento (União Brasil–BA), cut the term from 2 years to 1 year and excluded permission for the new government to borrow from international organizations to invest outside the ceiling. read the full of the report (149 KB).
But the ceiling-breaking PEC also releases around R$ 100 billion from the fiscal anchor, in addition to the cost of the income transfer program that will recompose the budgets of ministries in Lula’s 3rd term as head of the federal government.
In the 2nd round, there were 331 votes in favor and 163 against the PEC. In the 1st round, on Tuesday (20.Dec), the score was 331 to 168.
Here are the points of the PEC:
- 🇧🇷enlarge” (breaks) the spending ceiling of BRL 145 billion for 1 year;
- releases up to R$23 billion in off-cap investments per year starting in fiscal 2022;
- increases the constitutional limit of taxable individual amendments (of mandatory payment) to 2% of net current revenue – in 2023, it will be R$ 21.3 billion;
- authorizes the general rapporteur of the 2023 Budget to allocate R$ 9.85 billion of the money from the rapporteur’s amendments, overturned by the STF, for discretionary expenses (of free application) of ministries.
The PEC is the most difficult type of proposal to approve. It needs at least ⅗ of the votes in 2 rounds of voting, in both Houses of Congress – that is, 308 deputies and 49 senators, at least.
Unlike bills, in which the House that authored the proposal has the final word, constitutional amendments are only enacted when there is consensus on the text between the Chamber and the Senate.
In the voting on the highlights – passages voted separately that can change the text –, the deputies maintained the device that allows the future Lula government to send a substitute for the fiscal rule.
There were 366 votes for keeping the device, and 130 for removing it. The proposal that asked for the removal of the section was presented by Novo.
The Chamber, however, approved another highlight of the PL, which excluded the passage that authorized Lula’s transition team to decide on the allocation of R$ 23 billion in investments outside the spending ceiling.
In practice, the measure was redundant, since the general rapporteur for the 2023 Budget, senator Marcelo Castro (MDB-PI), had already accepted the requests of Lula’s team in its opinion in the CMO (Mixed Budget Commission) before the vote in the Chamber.
The Chamber still needs to analyze a highlight of Novo that can change the final text.
In the section of the PEC that allows the use of forgotten resources from the PIS/Pasep that were not claimed within a period of 20 years, Nascimento transformed the amount of the accounts into a source of revenue for the R$ 23 billion in investments outside the cap, and no longer an expense additional. The value was deducted, therefore, from the total hole to the fiscal anchor.
The calculation of the fiscal impact of the proposal by specialist Dalmo Palmeira, adopted by Power360 in the approval of the PEC by the Senate, it considered an expense outside the ceiling of R$ 7.5 billion with Fiocruz’s own revenues. He corrected the amount to BRL 88 million, as stated in the PLOA 2023.
With the change in the section on PIS/Pasep and the revision of Fiocruz’s own revenue calculation, the impact of the PEC outside the ceiling is around R$ 170 billion.
The duration of the proposal was the main point of disagreement between congressmen. In order to convince deputies to approve the ceiling-breaking PEC, Lula’s transition team and Chamber leaders crafted an agreement to reduce the 2-year term to 1 year.
The arrangement also included a way to compensate for the overthrow of the rapporteur’s amendments by the STF (Federal Supreme Court).
The approved text increases individual budget amendments by 82%, from R$11.7 billion to R$21.3 billion.
With the new sections, the proposal needs to go back to the Senate and only then will it be enacted. The President of the House, Rodrigo Pacheco (PSD-MG), participated in the agreement that unlocked the PEC in the Chamber and has already scheduled a session to conduct the approval of the amendments with the senators.
One possibility would be for Pacheco, who is also president of Congress, to immediately promulgate the parts of the ceiling-breaking PEC that did not have changes in the Chamber. However, the tendency is to conclude the full vote in the Senate and, only later, transform the proposal into a constitutional amendment.
The 2023 Budget remains blocked while the PEC is not voted on definitively, and will only move forward after its enactment.
Members of Congress need to race against time to approve the Budget at the CMO (Mixed Budget Commission) and the National Congress by Thursday (22.Dec). On the 6th (23.dec), the recess of the Legislative begins.
The approval of the proposal represents a political victory for Lula who, despite the stumbles with PT articulators in the Chamber and Senate, managed to approve an amendment to the Constitution in 15 days in the National Congress.
REPORTER’S AMENDMENTS
The version of the ceiling-piercing PEC being voted in the Chamber this Tuesday (20.Dec.2022) boosts individual amendments by 82% and gives each senator R$ 59 million to indicate in the Budget per year, an amount almost twice as high than that of deputies, of R$ 32.1 million.
Until now, each congressman would be entitled to R$ 19.7 million in tax amendments (mandatory payment by the federal government) in 2023. The money is usually sent to works chosen in their electoral bases. In practice, they are resources for making politics, consolidating support and forwarding the re-election itself.
Individual amendments are a fraction of the Budget whose destination each congressman can decide. Everyone is entitled to the same amount, regardless of the political group to which they belong.
The rapporteur’s amendments would add up to R$ 19.4 billion in 2023. They ended up sliced. Around R$9.6 billion went to individual amendments, which jumped from a total of R$11.7 billion to R$21.3 billion.
It is natural that in the Senate, the House that represents the States, the value of individual amendments is higher than that granted to the Chamber.
But most importantly: everyone, deputies and senators, won and profited from this arrangement. They start 2023 with much more guaranteed money than they had before what was widely seen as Lula’s operation with the Supreme Court to eliminate the rapporteur’s amendments.
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