Congress enacted this Wednesday (Dec.21, 2022) Constitutional Amendment 126, which frees up around R$170 billion outside the ceiling for the future president Luiz Inacio Lula da Silva (PT) spend on campaign promises in 2023.
The validity of the hole in the ceiling (which Lula’s allies call “enlargement” of the fiscal rule) is only 1 year, less than the 2 years initially approved by the Senate and well below the 4 years of the original proposal in Marcelo Castro (MDB-PI), prepared together with the PT.
The total amount of license to spend also fell short of what the president-elect wanted. In the end, the winners were deputies and senators, who received a “bonus” of BRL 9.6 billion in individual amendments to the Budget as part of the negotiation to approve the proposal.
O extra money for congressmen to irrigate electoral strongholds is the result of an agreement between the presidents of the Senate, Rodrigo Pacheco (PSD-MG), and the Chamber, Arthur Lira (PP-AL), to save their own re-elections after the STF (Federal Supreme Court) overturned the rapporteur’s amendments🇧🇷
Individual amendments to the Budget are mandatory, which means that the government is obliged to pay for them. With the increase in the amount reserved for them, congressmen become less dependent on the Executive Branch to send money to their electoral bases.
In the chess of the political game, the President of the Republic – as of January 1, 2023, Lula – loses. The budget execution, of the now extinct rapporteur’s amendments, was in the hands of the government, which could dictate the release of the budget according to negotiations to form a support base in Congress.
Here are the points of constitutional amendment 126 of 2022:
- 🇧🇷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;
- releases donations and own income from the spending ceiling to federal universities, scientific institutions and socio-environmental projects.
The license to spend will allow Lula to fulfill his main campaign promise, which is to pay the Auxílio Brasil of R$600 –which, through a billmay once again be called Bolsa Família – and R$ 150 for beneficiary families with children up to 6 years old in 2023.
The vote on the proposal in the Senate was loose. Deliberation in the Chamber was tight and demanded more concessions from Lula’s team.
Obstacles in the processing of the constitutional amendment were blocking the progress of the 2023 Budget, which can now be voted on in the CMO (Mixed Budget Commission) and in the plenary of Congress – the expectation is that the two votes will be on Thursday (22.dec) .
This is because the general rapporteur for the 2023 Budget and author of the approved proposal, senator Marcelo Castro (MDB-PI), considered the effects of the constitutional amendment in his opinion.
It did so by increasing various budgetary reserves:
- R$ 70 billion for the Brazil Aid;
- R$ 98 billion to recompose funds from ministries, such as Health, Education, Regional Development and Infrastructure.
The enacted constitutional amendment still left in the hands of the budget rapporteur another R$ 9.85 billion (a slice of the money from the extinct rapporteur’s amendments that had to be reallocated) that Castro will apply as a discretionary amount (of free application) of the ministries.
REPORTER’S AMENDMENTS
The change in the Constitution turbine the individual splices by 82% and gives each senator BRL 59 million to indicate in the Budget per year, an amount almost twice as high as that of deputies, of BRL 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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