Lula vetoes R$5.6 billion in parliamentary amendments

President Luiz Inácio Lula da Silva (PT) sanctioned, this Monday (22), the 2024 Budget, with a veto of R$5.6 billion to parliamentarians’ committee amendments. The information was given by the government leader in Congress, senator Randolfe Rodrigues (no party-AP). The total amount allocated was R$16.6 billion. With Lula’s cut, around R$11 billion remains for use by parliamentarians in this articulation.

In his justification, the senator stated that the reason was the drop in inflation. “Having lower inflation, consequently, we have a lower revenue forecast. This imposed the need for us to have some vetoes. This is what happened with the commission resources approved by Congress”, said Randolfe. He added that Planalto will “debate and talk with Congress to find the best solutions.”

With the veto, the amount of R$53 billion in parliamentary amendments drops to R$47.4 billion. In conversation with journalists, the rapporteur of the 2024 Annual Budget Law (LOA), Luiz Carlos Motta (PL-SP), stated that the Minister of Planning and Budget, Simone Tebet, committed to replacing the vetoed amount.

“Logically, due to the reduction in the IPCA, the government lost revenue and, therefore, it had to make some cuts. The minister committed to doing this as quickly as possible so that we can, of course, discuss how this will be replaced,” she stated.

However, Motta signaled that the veto should be overturned by Congress if there is no replacement. “If a solution is not found, the parliamentarians’ objective will be to overturn the veto”, declared the parliamentarian.

Lula’s veto displeased parliamentarians and could open a new crisis between the Planalto Palace and Congress. Behind the scenes, congressmen interviewed by the report stated that the government’s action soured the climate between the two powers. Being an election year, parliamentarians sought to increase amendments with the aim of boosting transfers to municipalities.

Understand what Commission Amendments are

Known as RP8, Commission Amendments are funds reserved by the thematic committees of the Chamber and Senate for investments in works and services indicated by deputies and senators.

Unlike other types of amendments, such as individual amendments (indicated by individual parliamentarians) and state bench amendments (indicated by deputies and senators from the same state), commission amendments do not require mandatory payment. This allows the Executive to dose their release throughout the year, which opens the possibility for them to be used as a bargaining chip to obtain support in Parliament.

Last year, during negotiations on the text, parliamentarians tried to establish a payment schedule for committee amendments, seeking to make their execution mandatory. However, this measure was removed from the proposal by the rapporteur, deputy Danilo Forte (União-CE). However, the calendar for payment of mandatory amendments, such as individual and bench amendments, was approved.

In November 2023, the Partido Novo called the STF to end the commission amendments. According to the party, they turned into a new “secret budget”, with no clarity about the parliamentarians responsible for indicating to the government where the resources will be applied.

The nickname was given, until last year, to rapporteur amendments. Deputies and senators with great influence reserved funds within the heading directly with the ministries, without transparency regarding the application of the resources. Therefore, in December 2022, the STF considered this form of allocation unconstitutional and prohibited its continuation.

According to deputy Marcos Feliciano (PL-SP), the Lula government resembles the government of former president Dilma Rousseff (PT) by creating new friction with the National Congress. At the time, the former representative was asked by congressmen to release amendments.

“He is digging his own grave. Walking in Dilma’s path, he will get to where she is,” said the congressman.

LOA predicts revenue of R$5.5 trillion for 2024

The Annual Budget Law signed this Monday foresees expenses of R$5.5 trillion. The majority of this amount refers to the refinancing of public debt. Primary expenses, limited by the new fiscal regime approved this year, reach R$2 trillion.

The fiscal target of the 2024 Budget is to bring the public deficit to zero, that is, to balance tax revenues and funding and investment expenses. But the Annual Budget Law still indicates a small surplus of R$3.5 billion in the accounts. The target will be considered met if the result is negative by up to R$28.8 billion.

Electoral Fund of almost R$5 billion

The LOA sanctioned by Lula also provides for the transfer of R$4.9 billion to the electoral fund, which will be used in this year’s municipal campaigns. Initially, the amount proposed by Planalto was R$940 million, but the amount approved by Congress was maintained. The distribution of the amount for campaigns takes into account the size of the parties’ benches based on the result of the previous election and follows the following criteria:

• 2% is distributed equally among all registered parties;
• 35% consider the vote of each party that had at least one deputy elected in the last election for the Chamber;
• 48% consider the number of deputies elected by each party in the last election, without taking into account changes throughout the legislature; It is
• 15% consider the number of elected senators and those who were in the middle of their term on the day of the last election.

TCU warned of possible loss in accounts

On the 17th, the Federal Audit Court (TCU) issued a report on the 2024 Budget and warned about the possibility of a R$55.3 billion hole in public accounts this year. According to the court, the revenues foreseen in the budget prepared by the government and approved by the National Congress are “overestimated”. If the result indicated by the court is confirmed, this will mean a failure to meet the 2024 fiscal target,

“In the Union’s Annual Budget Bill for the 2024 financial year, the estimate of Net Federal Primary Revenue at 19.2% of GDP is far above what was observed in recent years, indicating that it is overestimated, which leads to the possibility of having a primary deficit of up to R$55.3 billion and failure to meet the fiscal result target proposed in the LDO Project for 2024”, says the TCU.

Still according to the document, the projection of net revenue of 19.2% of the Gross Domestic Product (GDP) is excessively “optimistic” and does not seem feasible, considering the average standard of recent years.

In the Court’s assessment, the methodology used by the Executive to calculate new revenues was not detailed in the Budget, “creating doubts regarding the real revenue-generating capacity of legislative innovations”.