New rule creates “periodic review of expenditures” removes the so-called “golden rule” from the Constitution; chance of current Congress passing is small
the senator José Serra (PSDB-SP) said on Monday (14.Nov.2022) that it is collecting signatures from colleagues to present a PEC (proposed amendment to the Constitution) to replace the spending ceiling with a federal government debt limit rule.
The text, according to the toucan, would also create the “periodic review of expenses” and would remove from the Constitution the so-called “Golden Rule” – a rule that prohibits the government from borrowing to pay current expenses. behold the entirety (200KB).
The proposal would be an alternative to the PEC hopscotch, with which the transitional government of the president-elect, Luiz Inácio Lula da Silva (PT), wants to take BRL 175 billion out of the spending ceiling to pay the Auxílio Brasil of BRL 600 and an additional BRL 150 per child up to 6 years of age in beneficiary families.
Serra’s term in the Senate ends on February 1, 2023. He competed for a federal deputy seat in the 2022 elections, but did not win it.
🇧🇷Admittedly, the spending cap is dysfunctional and needs to be replaced. I propose that the new fiscal anchor be the debt limit provided for in art. 52 of the Federal Constitution. The government would have 6 months to submit its debt limit proposal to Congress”, wrote Serra on his profile on twitter🇧🇷
He refers to item 6 of Article 52, according to which it is exclusively up to the Federal Senate “establish, at the proposal of the President of the Republic, global limits for the amount of the consolidated debt of the Union, the States, the Federal District and the Municipalities🇧🇷
Serra stated that the PEC stipulates that, during a period of 6 months, the federal government could open extraordinary credit of up to R$ 100 billion to pay the Auxílio Brasil (which the toucan, like Lula and his allies, calls “Bolsa Family”) and granting a real increase in the minimum wage.
One of the arguments of the elected government in defense of the PEC hopscotch is its assessment that only a constitutional amendment would provide legal certainty to circumvent the spending ceiling, the primary result target and the so-called “Golden Rule🇧🇷
For Serra, theGolden Rule” lost the ability to limit public indebtedness. He defends removing it from the Constitution so that the instrument could be regulated by a complementary law, “paving the way for its reformulation🇧🇷
The toucan still defends establishing the “Periodic Expenditure Review Plan”, which would be based on the evaluation of public policies. 🇧🇷The President of the Republic would have the obligation to show what needs to be revised to maintain fiscal sustainability”, he stated.
🇧🇷All these measures represent an opportunity for the country to reinvest, spend well and resume economic growth, without losing sight of fiscal responsibility. This will be the PEC of Reconstruction. I’m still collecting signatures, but I hope I have the support of my peers”, added Serra.
Procedure
To be formally presented, a PEC must receive the support of at least ⅓ of the 81 senators, that is, Serra will need to collect the signatures of at least 26 peers, in addition to his own.
The Senate’s bylaws also determine that, when passing through the House, the PEC is analyzed and voted on by the CCJ (Constitution and Justice Commission) before going to vote in the plenary.
The proposal is only approved with a favorable vote. of at least 60% of the senators, that is, 49 of the 81 members of the House.
Treasury proposal
The technical team of National treasurelinked to the Ministry of Economy, presented this Monday (14.Nov.2022) a more flexible proposal to replace the spending ceiling – a fiscal rule that prevents government spending from increasing above inflation.
The team’s idea is to allow real expenditure growth (above inflation) according to the level and trajectory of public debt. There is also a proposal to grant a bonus in case the public accounts end the year with a positive balance (surplus). Here’s the full (6MB).
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