Fiscal framework: see the next steps of the proposal in the National Congress

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A new set of fiscal rules was presented by the government and needs to be approved by Congress to take effect and replace the spending cap. Ministers Fernando Haddad (Finance) and Simone Tebet (Planning) presented this Thursday (30th) the so-called new fiscal framework, a set of rules that President Lula’s government wants to implement to balance public accounts. The rules seek to replace the spending ceiling, a rule in force since 2017 and which limits most of the Union’s expenses (Executive, Legislative and Judiciary) to the inflation of the previous year. During last year’s election campaign, then-candidate Lula repeatedly criticized the ceiling, stating that the measure, in practice, over the years, limited investments in areas such as health, education and security. The new fiscal framework presented by the government foresees, among other points: Expenditure linked to revenue Limit of real expenditure growth Interval for the primary result target And what are the next steps? See below how the next steps of the fiscal framework will be: What mechanism will the government use to present the proposal to Congress? The government informed that it will present a Complementary Bill to Congress. Proposals of this type must be signed by the President of the Republic, in the case of a government project, but may also be presented by parliamentarians or by the Federal Supreme Court. What is a complementary bill? Complementary law projects regulate devices included in the Constitution, they are different from Proposed Amendments to the Constitution, for example, which include or exclude items in the Constitution. Has the framework project been handed over to Congress? No. According to the Minister of Institutional Relations, Alexandre Padilha, the text should be sent to Congress next week. When the government submits, what are the steps? Complementary bills follow the procedure below (when they are not presented by senators): The bill will be sent to the Constitution and Justice Commission of the Chamber and then to the commission responsible for the topic (it could be, for example, the Finance and Taxation). If the understanding of the House is that the project involves more than three commissions, then a special commission is created. Approved by the committees, the text will go to the plenary; The proposal can be processed in an emergency regime, that is, it can be voted on more quickly, as long as it is a plenary decision. The proposal will be approved if it obtains the minimum support of 257 votes from the 513 deputies, in two voting rounds. Approved by the House, the proposal will go to the Senate. In the Senate, it is customary for the text to first pass through a commission, in this case the Economic Affairs Commission (CAE) or the Constitution and Justice Commission (CCJ), before being deliberated by the plenary. The text will only go straight to plenary if there is an urgent request, with the minimum support of 54 parliamentarians or leaders representing 54 senators. In the plenary of the Senate, this type of project needs 41 favorable votes to be approved, in a round of voting. If the Senate changes the text, the proposal will go back to the House. If the Senate approves the same text sent by the House, the proposal will proceed to presidential sanction.

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