Government falters in the Chamber, which talks about changing Lula’s fiscal plan – 04/25/2023 – Vinicius Torres Freire

The government took some blows to Congress. “It’s not even opposition, it’s confusion”, says a centrist parliamentarian with half a dozen mandates and leadership behind him. He says that the government is “undecided”, “takes a while to reach an agreement” and “hasn’t even organized his house yet”.

“You need to be careful, because there is the fiscal framework, which should change a little, and a lot of CPI coming in. Even without opposition, they are getting into trouble”, he says. It’s not the only one.

The government set itself the enormous task of approving a fiscal plan (expenditure and revenue) unprecedented in 20 years and a tax reform. For its “fiscal framework” to work, it needs a rare increase in revenue (relative to GDP, the size of the economy), greater than the revenue rises of the very exceptional years 2010-11 and 2021. But this time , will have to raise tax. It is difficult.

A government senator thinks that there is “excessive centralization in the Civil House, which does not dispatch quickly”. The senator says that Arthur Lira (PP-AL), president of the Chamber, “is a tractor, for good or for bad. [de votações]wants to know who puts where to control, in CPI or rapporteurship”.

An example. Lula modified, by decree, part of the laws known as the “sanitation framework”, which in short facilitate the privatization of these services. The decrees corrected some problems and, in the package, facilitated a precarious survival of the State in the water and sewage sector.

Relevant congressional leaders were not happy. The “milestone” was the subject of long parliamentary discussion, is still a fresh law and was an important moment in the 2016-2022 liberal agreement, in addition to encouraging investment plans. Lira said he does not want “setbacks” in this and other liberal landmarks of the period.

This Tuesday, Lira facilitated the vote that can overturn government decrees. What angered the group the most was the fact that the government “does not talk properly” and “is slow to show decision, who is in charge”, says the deputy. And?

It’s almost May and there’s still no relevant vote. In addition to the CPI on Coup Acts, three more will come into operation: the Americanas, sports betting and MST, which could scorch the government.

The impression that remains, in conversation with connoisseurs of parliamentary tricks, is that congressional leaders still do not understand or have not seen the government’s rules of the game and do not have clear agreements (resources in ministries, in addition to agreements on commands of positions in Congress) .

The commanders of the Chamber want to vote on the fiscal framework in May. The idea, it seems, is not to promote big changes. But the “liberal” protest against the lack of any way to force the government to run primary surpluses had an effect on this group.

Criticisms of the new fiscal rule deepen. Economists Marcos Lisboa, Marcos Mendes, Marília Taveira, Cristiano de Souza and Rogério Nagamine Costanzi published a detailed study on the perspectives of the plan. Lisbon and Mendes are tough critics of PT governments, certainly. Projections on GDP, revenue, inflation, expenditure, etc. they have something arbitrary and futuristic, ok.

But the study’s projections are reasonable and the math is strong. It is very difficult to have a surplus with mandatory expenses growing (social security with real readjustment of the minimum wage, readjustment of civil servants, linking health and education expenses to revenue, etc.), which in fact causes a flattening of other important expenses. The account does not close, even with historical revenue increases. It will be necessary to decouple and limit the increase in real spending.

Congress is given to expenses, of course, and will not listen to Lisbon, Mendes, etc. But he is willing to toughen the Lula-Haddad plan a bit. Given the current disarticulation of the government, which is almost a minority in the Chamber, it could happen.

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