Lira tries to deflate Lula’s bargaining power over the Budget

Lira tries to deflate Lula’s bargaining power over the Budget

A group of parliamentarians led by the president of the Chamber, Arthur Lira (PL-AL), is making political articulations to control an amount of R$ 9.4 billion from the public budget of Brazil, which is destined to expenses of the Executive Power. If implemented, this maneuver should further deplete the bargaining power that President Luiz Inácio Lula da Silva (PT) tries to exercise over deputies and senators to approve projects of interest to the government.

The resources in question are part of an amount of R$ 19.4 billion that was reserved for the so-called secret budget to be executed this year. This mechanism, which originally served to make minor adjustments to the budget law, ended up being extinguished at the end of 2022 by a decision of the Federal Supreme Court (STF). The Court considered it unconstitutional as it contravened the principles of transparency and fairness among parliamentarians.

The secret budget has served in recent years to benefit allies of the presidents of the Chamber and the Senate with resources addressed to their electoral strongholds. With the extinction by the STF, Congress signed an agreement with the elected government to redistribute its R$ 19.4 billion in other headings of this year’s Budget. The first measure was to boost the individual amendments of all parliamentarians and allocate a significant portion to a single Senate thematic committee.

Of the BRL 19.4 billion in the then secret budget, BRL 6.5 billion ended up in the Senate’s Regional Development Commission (CDR). Of the remainder, R$ 3.5 billion were used to fatten individual amendments and R$ 9.4 billion were available to the Executive for discretionary spending – that is, free for the government to spend as it wishes, without interference from parliamentarians. It is on this last value that Lira and her allies seek to give a new destination, pressuring the government to concede more.

According to Budget technicians in the Senate, the Planalto’s power of persuasion had already lost ground. This is because most of the BRL 46 billion in congressional budgets in the form of individual amendments to the Budget is already binding. That is, it must be paid by the government.

To reinforce this emptying of the Executive’s power over budgetary resources, Arthur Lira has expanded his influence in the Chamber, where the main projects of interest to Lula are processed. Not by chance, he has created difficulties for procedures and issued warnings about the risks to governance.

In practice, this advance by the parliamentarians over the budget that would have belonged to the Federal Executive, right in the first months of management, has already resulted in an important loss of “ammunition” by the Lula government to bargain with Congress and to guarantee a minimum base of support in both Houses. On the other hand, Planalto’s dependence on understandings with Lira is growing. He is responsible for the transit of projects such as Provisional Measures, Tax Reform and the text with the definition of a new fiscal framework.

Lira wants a block with expanded powers in the Legislative

Lira is the main articulator of the negotiation between the PP (47 deputies) and União Brasil (59) for the formation of a federation, interrupted due to regional conflicts. If there is an alliance between the parties, the President of the Chamber will be at the head of the largest political force in the House, with 106 deputies, surpassing PL (99) and the governing leftist federation PT-PC of the B-PV (81). The blocão consolidates a power rarely seen in the Legislature.

According to Senate budget advisers heard by the People’s Gazette, proof of this advance by Lira’s group over the R$9.4 billion available to the government, refers to one of the destinations that the mayor has already defined for part of the Executive’s resources. Lira wants to allocate BRL 2 billion to guarantee at least BRL 10 million in amendments to each of the 202 first-term deputies elected in 2022 and who did not help with this year’s budget law.

This smaller portion of the secret budget that returned to the government’s purview could also be used to meet the demands of parliamentarians, including the promises made by Arthur Lira to guarantee votes for the so-called Transition PEC (PEC 32/2022).

The Transition PEC was responsible for the BRL 145 billion overflow in the 2023 Budget. It aims to finance social programs such as Bolsa Família, Auxílio Gás, Popular Pharmacy and other public policies. A trigger mechanism has also been established to allow for additional investment by the government, but only if tax collections exceed forecasts.

One of the effects of redistribution of the secret budget was the increase in the value of parliamentary amendments from the percentage of 1.2% of the Union’s net current revenue to 2%, a record. The Chamber kept 77.5% of the global value of individual amendments and the Senate, 22.5%. Thus, the budget guarantees R$ 60 million per senator and R$ 34 million per deputy.

Senate technicians explain that, in practice, the dispute over secret budget funds between parliamentarians and the Executive began in the Lula government. This is because former President Jair Bolsonaro (PL) entrusted the entire process to Congress. The PT administration still needs to honor agreements already signed between ministries with states and municipalities in previous years and can only open up bargaining opportunities by imposing bureaucratic delays.

Senate commission boosted with budget funds is under the baton of the general rapporteur

Senator Marcelo Castro (MDB-PI) was the rapporteur for the 2023 Budget and made the indications of the so-called secret budget. Even with the change of legislature and government, he continued commanding a large part of these funds.

That’s because Castro took over, on the 8th, the Commission for Regional Development and Tourism (CDR) of the Senate, the collegiate responsible for the destination of R$ 6.5 billion in amendments. Last year, this same commission operated with a relatively lower amount of resources: R$ 90 million. In 2021, there was even money for such amendments. Another contrast is that the other committees of the House and Senate were left with R$ 1.1 billion in amendments of this type.

To completely close the door of the Commission for Regional Development and Tourism to the opposition, Cid Gomes (PDT-CE) was also elected vice-president of the commission, representing a party that has only three seats in the House. The senator from Ceará accumulates the position of deputy on the Education Commission.

Castro does not detail any of the allocations of billionaire funds under the responsibility of the thematic commission he chairs and summarizes his plans to fulfill the mission of the CDR itself: to reduce social and regional inequalities. “Without course corrections and projects for the future, these inequalities tend to deepen”, he said. He promised to deepen debates in public hearings on agendas such as investments in basic sanitation services and road structure.

Planalto’s expectation is that Castro’s good relationship with the PT, having been minister of former president Dilma Rousseff (PT), will help in the negotiation to make viable works considered strategic by the Executive and that will help in the construction of the insufficient government base, within of the alert made by Arthur Lira to the PT administration last week.



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