Congress will take office following Lula’s guidelines – 01/22/2023 – Politics

If Arthur Lira (PP-AL) and Rodrigo Pacheco (PSD-MG) confirm their favoritism to continue commanding the Chamber and the Senate, the National Congress that takes office on February 1 should start work in line with the agenda defined by the government of Luiz Inácio Lula da Silva (PT).

In the economic area, the focus will be on approving the new fiscal anchor —in replacement of the spending cap— and tax reform.

In the political field, the analysis of the provisional measures that restructured the Esplanada dos Ministérios, which jumped from 23 to 37 folders, in addition to the possible overthrow of vetoes by Jair Bolsonaro (PL) and the discussion of proposals in response to the coup attacks on January 8 .

Government leaders already rule out moving forward with what they call the “leftist agenda” — the expression agenda of customs was used to refer to Bolsonaro’s conservative agenda.

That is, the government and its allies in Congress are going to abandon for the time being issues that could cause noise and harm the economic agenda, such as the expansion of the rules on legal abortion and the inclusion in the Constitution of the right to marriage for people of the same sex.

The government supporters are also looking for a way to bury the CPIs (Parliamentary Commissions of Inquiry) that the PT members and allies defended to investigate the acts of January 8. Lula has already said that a commission at this point could end in “tremendous confusion”.

The government supporters will say that investigations into the attacks are already being carried out by the police and judicial authorities.

On this issue, the Ministry of Justice and members of the Congressional summit intend to approve a package of measures in response to acts of vandalism that destroyed the headquarters of the three Powers.

Such as Sheet showed, Justice is considering proposing to Congress new punishments for crimes against the Democratic State of Law, including the loss of public office and the impossibility of taking part in public examinations. Also under evaluation is the creation of new criminal types for those who attempt against the lives of the heads of the three Powers.

In parallel, congressmen elaborate projects on the same theme.

Even with the support of the summit, the legislature that begins in February will require the new government to build a solid base to avoid setbacks in crucial matters.

The PT and allied parties intend, for example, to overturn Bolsonaro’s vetoes such as the provisions of the Law of the Democratic State of Law, which, in the opinion of specialists, could increase the punishment against those who participate in coup acts.

Since Lula was elected, Lira and Pacheco have signaled that they would help the president achieve governance. The biggest example so far occurred in December, when the Legislative leadership helped to sew the PEC (Proposed Amendment to the Constitution) that increased the spending ceiling by R$ 145 billion this year —and also authorized another R$ 23 billion in investments outside the spending limit.

Leaders of Congress have already indicated that they welcome the priority given by Minister Fernando Haddad (Finance) to tax reform, an issue discussed for decades by Parliament, but with little progress.

Last week in Davos (Switzerland), Haddad stated that, depending on the government, the tax reform will be voted on in the first half. The minister participated in the World Economic Forum, in which he also pointed out that he intends to present the fiscal framework by April. At the meeting, he said that the ideal is to reach a consensus between two PECs that are being discussed in Congress.

PEC 45 replaces five taxes (PIS, Cofins, IPI, ICMS and ISS) with a Tax on Goods and Services and a Selective Tax on cigarettes and alcoholic beverages.

PEC 110 creates the CBS (Contribution on Goods and Services) with a merger of PIS and Cofins, and the IBS (Tax on Goods and Services), with a merger of ICMS and ISS. In addition, it replaces the IPI (Tax on Industrialized Products) with a selective tax on items that are harmful to health and the environment. Within the economic team itself, however, it is already priced in that the text will be dehydrated.

The simplification of the tax system is seen within the PT as essential for the design of the new fiscal framework that will replace the spending ceiling.

“I think the two would have to go hand in hand. I think that to have a good fiscal anchor there should be, first, the tax reform”, says deputy Reginaldo Lopes (MG), who occupies the PT leadership in the Chamber until the end of the month.

His successor as of February, Zeca Dirceu (PR), also defends that the bench prioritize measures already announced by Lula. “Everything that depends on Congress to help the government to control inflation, to improve the concepts of the country’s economy, which are very bad. There will have to be an effort here, an absolute priority.”

Two provisional measures can serve as a litmus test to measure Lula’s initial base of support 3. The first is the one that reestablishes the casting vote within the scope of the CARF (Administrative Council of Tax Appeals), which judges tax conflicts.

This vote ensured that the Revenue would maintain the collection in the event of a tie in the judgment — something common in disputes involving large amounts, since the court is made up of representatives of the Tax Authorities and taxpayers. Haddad has warned of the significant increase in the stock of lawsuits, which jumped from BRL 600 billion to BRL 1.2 trillion in four years.

The end of the casting vote was decided by Congress in 2020 and some parliamentarians have already indicated resistance to the government’s proposal.

Another test will be the provisional measure that transfers the Coaf (Financial Activities Council) from the Central Bank to the Ministry of Finance, the portfolio to which the body was linked before the Bolsonaro government.

Bolsonaro initially tried to transfer Coaf to the Ministry of Justice, then occupied by former judge Sergio Moro. Congress, however, returned the agency to the Ministry of Economy. Shortly afterwards, the Coaf was sent to the Central Bank.

The MP that extinguished Funasa (National Health Foundation) is also seen as sensitive. The provisional measure transferred the body’s attributions to the ministries of Cities and Health. Funasa was coveted by political parties for carrying out sanitation works in small municipalities. There is fear that the center will decide to recreate the foundation with an eye on the positions that would be opened.

“Our action priority, under the guidance of president Lula and minister [Alexandre] padilha [Relações Institucionais] is the agenda of Brazil’s needs, restoring social programs, such as Minha Casa Minha Vida and Bolsa Família, in addition to advancing the economic agenda”, says the leader of the government in Congress, Senator Randolfe Rodrigues (Rede-AP).

Congress will start the Legislature on February 1, with the inauguration of new parliamentarians and the election for the command of both Houses.

Lula’s left managed to elect about a quarter of the total seats, which led the government to distribute ministries to attract center and right-wing parties, especially PSD, MDB and União Brasil. Even so, he will need support from centrão members (PP, Republicans and PL) to have a solid margin of support.