Fiscal framework is a risk for the Lula government, says Singer – 02/17/2024 – Power

One of the main scholars of Lulism, a term he coined, political scientist André Singer, 65, says that the first year of the PT member’s third term was marked by “weak reformism in slow motion”.

In his view, in the current president’s two previous terms (2003-10), there was a gradual process of income distribution without causing radical losses to capital. Now, he says, this phenomenon is suffering the effects of the fiscal framework.

“The framework is very restrictive. It imposes a huge containment of expenses”, says Singer, who is a member of the PT and served as spokesperson and press secretary in the first Lula government.

In an interview with Sheethe says that the scenario of reduced growth could reverse the population’s sense of well-being in 2024, generating losses for the government in the municipal elections in October, which could extend until 2026. The risk, he points out, is to revitalize the opposition right-wing.

“In election years, governments have to tip the scales, so that things are improving,” he says.

The idea of ​​a “weak reformism”, which you. used to define Lula’s previous governments, does it apply to the current one?
Weak reformism is very gradual, practically homeopathic changes that you sometimes have difficulty perceiving. However, as they accumulate, they result in a more significant change. For example, [nos governos anteriores de Lula] There was a gradual increase in the real minimum wage. Each one was small, sometimes 2%, 3%, but in total, it ended up giving 70%, which is quite a lot.

This idea of ​​Lulism in slow motion is mine with professor Fernando Rugistky [da Universidade of the West of England]. We understand that the main item of economic policy in the first year was the fiscal framework, which is, in our analysis, very restrictive. It imposes a large cost containment. According to calculations by the USP Macroeconomics of Inequalities Research Center, if there had been a fiscal framework between 2003 and 2010, it would not have been possible to do what was done.

The framework can kill this reformism, even if weak?
President Lula, just as he did in his first two terms, continues to look for loopholes. Can the framework nullify attempts at reformism? Strictly speaking, it can. We are not saying this will happen. Even before taking office, the president negotiated the so-called Transition PEC with the president of the Chamber. She secured the R$600 Bolsa Família and added R$150 more per child. Furthermore, it obtained resources to continue programs that are typical of weak reformism, such as Farmácia Popular.

Are there conditions in Brazil for more intense reformism?
It’s the $1 million question. Not even in the first terms [de Lula] there would be a correlation of forces to go much further. On the other hand, from the point of view of what the country needs, it is necessary to go further. If we think that Brazil is a country whose construction was interrupted, to use Celso Furtado’s formulation, it seems clear that it will not reach the level of integration of the half that was never integrated if there is no stronger reformism. Politics acts within what is possible, but it creates possibilities as it convinces people of certain things. And in doing so, the correlation of forces changes.

The new industrial policy is one of those loopholes that Lula has searched?
Without a doubt it is an attempt. My first impression is that it has not yet found its material points of support. It seems like a somewhat theoretical plan. There is a new situation in the world, due to what has been happening since 2008. What has been called the new Washington Consensus has placed reindustrialization at the center of the agenda. And this is an important transformation, because the old consensus was very strongly against industrial policies.

Like mr. Do you see the relationship between the Executive and Congress today?
What is happening in Congress is difficult to understand. Possibly there is a transformation that comes from the [ex-presidente da Câmara] Eduardo Cunha here. The Chamber gained an autonomy and strength that it did not have before. It seems that we are facing a process that shows no sign of going back. Along with this there is another thing which is the creation of an extreme right-wing bench. There was no such thing. I would say that today, the extreme right in the Chamber is an important bloc, but it is isolated. It is not capable of turning the game around.

The first year of government was dedicated to undoing Bolsonarism measures. Did you lack the courage to take a step further and not just end the game?
I wouldn’t talk about a lack of boldness, but what would be the program we should want? That’s what the [Joe] Biden is doing it in the USA. The situations are similar, Biden took office after four years of [Donald] Trump, who in a way tried to demolish the North American State and, in part, succeeded. The Biden government today represents an investment in rebuilding infrastructure, in social protection, which already came from the Covid era. And in the clean reindustrialization of the country, with energy transition, in the order of US$ 3 trillion. In Brazil there is immense pressure from what I call the cosmopolitan fraction of the bourgeoisie, which, at the last moment, decided to support President Lula, and was decisive for him to win. There is enormous pressure from this sector towards austerity. Not in the sense of not increasing State spending, but of decreasing it.

Is the president a hostage of this cosmopolitan bourgeoisie?
He has to take this reality into consideration. In capitalist countries, it is very difficult to govern against capital. Now, taking it into consideration is one thing, it’s another to try to think about how to deal with it.

Mr. Do you see the possibility of this pressure for austerity, represented above all by the framework, generating negative electoral effects for Lula and the left this year?
I see risk. I’m not saying it will happen. There is already a forecast that growth this year will be half that of last year. This is not a good sign, because the drop from 3% growth to 1.5% represents losses for the population. Tends to reduce the “feel good factor” [sentimento de bem-estar]: things are improving and give hope that they will improve further. When things are getting worse, the person has the feeling that they are going to get worse. In election years, governments have to tip the scales so that things are improving.

Like mr. Do you see this debate within the PT?
Today it seems to me that there is a certain unity expressed by the president [Gleisi Hoffmann] in the direction of pushing for more public investment, making the economy grow and providing a horizon of reformism, which I would call weak, but reformism. The PT is doing its role.

Isn’t isolating Minister Fernando Haddad problematic for the government?
There may have been a division of labor between the president and the Minister of Finance, in which the minister was in charge of making the concessions that the bourgeoisie was demanding and the president was in charge of continuing to look for loopholes so that changes in favor of the popular classes could be made. made.

What would be the political consequence for Minister Haddad of the change in the fiscal target?
The problem is analyzing something that, in my opinion, is one of the most interesting topics at the moment, what I call the cosmopolitan fraction of capital. This possible weakening of the Minister of Finance, if the target is changed, would result from a withdrawal of confidence from the bourgeoisie.

Is the bourgeoisie guarantor of Haddad?
I don’t know if she is Haddad’s guarantor, but the tax framework was created for her.

Like mr. do you project the electoral scenario for 2026?
Bolsonaro’s ineligibility is the most relevant factor in the political events of 2023. The USA was unable to do this and is grappling with the possible return of Trump. This decision disorganized the field led by the extreme right, creating a kind of vacuum. Looking for someone in his place is not simple, in part because he has built a charisma. For certain sectors of the middle class he is repulsive, but Bolsonaro dialogues with the popular classes, which is difficult to do. I think it is likely that the opposition to the current government will be competitive. But in the presidential regime and in a political system in which the parties, with the exception of the PT, are weak, the figure of the candidate is central. So who can articulate a competitive bloc?

And in the center, Mr. Do you see any possibilities?
The PSDB case is of the greatest interest. There was a shift of the party’s base to the extreme right. People wanted a more radicalized opposition. The question I ask is whether this base has returned more to the center. I don’t know.

Is there any possibility of Lula entering part of this electorate that is currently on the right?
It will depend a lot on the economy. There is an electorate in dispute in the large metropolitan regions, which is 2 to 5 minimum wages of monthly family income. It’s divided, it was mostly for Bolsonaro in the 2022 election, but it wasn’t a huge difference. What does this electorate want? Good jobs and income. Some of these workers are precarious. Let’s say that Brazil entered a period of strong growth. President Lula would probably attract a portion of these voters, and the electoral gravity itself would cause certain organizations, for example, evangelical sectors, to come [para ele].

Is the economy still what defines elections? Not values, as many currently defend?
In the Brazilian case, yes. I recognize that a lot has changed, there is no doubt that the type of alliance that Bolsonaro made with evangelicals since 2018 has had weight. The question of values ​​and the question of identity are components that have to be taken into consideration. But I continue to think that in the Brazilian case the economy is more central.

Mr. Do you see the possibility of the government changing course in 2024?
I don’t see any signs of an inflection from President Lula regarding 2023. I don’t want to commit to a pessimistic assessment, because there are many elements at stake. But there is a risk, which is given by the nature of the framework. I feel that the president, for now, prefers to take this risk and is perhaps betting on other elements, such as possible international openings. He opened this window by saying that the deficit does not need to be zero. In other words, he is saying: “if the bets I’m making don’t work out and there is a downsizing of such an order that it will make my government unviable, I can’t accept it.”

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X-ray | André Singer, 65

Full professor in the Department of Political Science at USP, he has a degree in journalism and social sciences from USP, a master’s degree, a doctorate and a professorship in political science from the same university. He was Editorial Secretary of the Sheet, spokesperson for Lula’s campaign in 2002, Press Secretary and spokesperson in the first Lula government. He is the author of “Left and Right in the Brazilian Electorate” (2002), “Os Sentidos do Lulismo” (2012), “As Contradições do Lulismo” (2015), “O Lulismo em Crise” (2018).