Parliamentarians want to shield amendments due to contingency

The commitment of the government and the Ministry of Finance to maintain the target of zero fiscal deficit for 2024, even after statements by President Luiz Inácio Lula da Silva (PT) that this would be difficult, may end up spilling over to the National Congress, which will have to cut into your own meat to help pay the bills. Therefore, deputies and senators are already thinking about ensuring the preservation of parliamentary amendments, if a contingency is necessary, a type of spending block.

According to estimates made so far by technicians from the federal government and Congress, the blocking of funds to guarantee a zero deficit must be at least R$20 billion. While the Treasury works with an initial value of between R$22 billion and R$26 billion, deputy Danilo Forte (União-CE), rapporteur of the Budget Guidelines Law, estimates that the expense cut could reach R$62 billion.

To compensate for a possible blockage, if the government is unable to approve measures being processed in the Chamber and Senate to increase revenue, such as the one that ends subsidies for companies, Danilo Forte suggested the creation of bench amendments, called RP 5, a type of parliamentary amendment that would be aimed at parties, with the aim of obtaining greater control over payments, and that would be included in next year’s Budget, but is already facing resistance from leaders, and also from the president of the Chamber, Arthur Lira (PP-AL).

Therefore, the rapporteur of the Budgetary Guidelines Law is already considering leaving these amendments – which would receive the resources previously allocated to the so-called “Secret Budget”, and which was considered unconstitutional by the Federal Supreme Court (STF) – to 2025, although he still states that he will talk to Lira and the leaders about the subject.

“I think this debate has to be held in parliament, it is an idea that was being discussed, but we will listen to the president and leaders for a clearer understanding”, assured Danilo Forte, claiming that there was misinformation about the amendment modality, which would bring more transparency than the current model.

The so-called RP 5 amendments would not be mandatory, that is, mandatory payment, and the resources would be allocated to parties according to the size of the benches, which would benefit parties with greater representation, such as PL and PT.

Amendments are used by the Executive as bargaining chips

Today, the amendments are in the hands of the Lula government, which decides when to release the money according to need, often in negotiations considered important, as occurred in the tax reform vote, for example, when on the eve of approval, approximately of R$5.3 billion.

Contrary to the new modality, the president of the Chamber, in turn, has tried to convince party leaders to reinforce the cash of so-called commission amendments, which already exist, and which this year represent R$ 6.8 billion, but transforming them in taxes – mandatory payment, and still subject to a transfer schedule. This is because it is common to hear behind the scenes in Congress that the government is delaying payments, and parliamentarians are unable to make the necessary transfers to their electoral base.

Attempt to “fatten up” committee amendments is criticized by the PT

The federal government does not view the proposal favorably. The president of the Workers’ Party, Gleisi Hoffman (PT-PR), criticized the “reinforcement” in the committee amendments, as defended by Arthur Lira. The deputy said on social media that Lira is contradicting herself by defending the zero deficit and, at the same time, wanting to increase the funds allocated to commission amendments.

“Arthur Lira says he is in favor of zero fiscal deficit, but wants to make payment for amendments to thematic committees in Congress mandatory. This year alone this would cost more than R$6 billion in new expenses for the federal government. In other words: they can cutting from Health, Education, the PAC, minus the amendments from deputies and senators. Making savings by cutting from others is easy, right?!”, said the deputy.

For the PT president, Congress’s intention to increase the value of amendments to the Budget for 2024 from R$36 billion to R$46 billion goes against some established measures, with the goal of zero deficit for next year and expansion of social programs.

In the opinion of political scientist Cristiano Noronha, from Arko Advice, it is common for Parliament to be more concerned about the issue of amendments during this period, as next year we will have municipal elections.

“In an election year, parliamentarians always have greater pressure for these amendments, which is why they are trying to expand mandatory amendments to try to restrict government cuts as much as possible. Now, on the other hand, parliamentarians are also aware of the fiscal issue, so much so that there was resistance on the part of the National Congress to accept a larger deficit next year. So they want to protect themselves on one side, but they are also aware of the restrictions that the country has”, he pointed out.

How amendments are currently distributed

Currently, there are three types of parliamentary amendments: individual amendments (RP-6), state bench amendments (RP-7) and committee amendments (RP-8). The rapporteur’s amendments (RP-9), known as the “secret budget”, were declared unconstitutional last year by the Federal Supreme Court (STF), in 2022, due to a lack of transparency – it was not possible to identify, for example, which parliamentarian had the budget was indicated.

To reallocate the R$19.4 billion allocated to such amendments in the 2023 budget, the government of President Luiz Inácio Lula da Silva (PT) divided the amount into two fronts: for ministries (RP-2) and for individual amendments (RP-6).

Ministry amendments are for the discretionary use of the Executive, but parliamentarians have already denounced that they are being used as bargaining chips to support bills of interest to the government. The same occurs with other amendments, even the mandatory ones (which are mandatory), since there is no need to comply with a calendar for the transfer of these amounts.

In total, R$9.8 billion that should have been allocated to the rapporteur’s amendments ended up in the ministries of Health, Cities, Agriculture, Education and Regional Integration.

Government hopes to approve measures to increase revenue

To try to close the accounts and guarantee a zero deficit, the Minister of Finance, Fernando Haddad, counts on the goodwill of deputies and senators to approve measures to increase revenue, which are being processed in both the Chamber and the Senate.

Only one of them, which ends the taxation of economic subsidies for companies, can reinforce cash by R$35.9 billion in 2024, but there is still no agreement on the text, which should be discussed by the leaders with Lira. Taxation of exclusive investment funds and investments abroad, among other projects, are also in the Treasury’s sights.

Blocking may be shared between the Executive and Legislative

In a recent meeting with Finance technicians and the rapporteur of the Budget Guidelines Law (LDO), Haddad suggested that the contingency, if necessary, be shared equally between the Executive and Legislative, which means that the same amounts cut from the ministries would also fall on parliamentary amendments.

The Joint Budget Committee (CMO) is expected to analyze this week Congressman Danilo Forte’s report on the Budget Guidelines Law (LDO) for next year, which defines the guidelines for preparing the 2024 Budget. Deputies and senators presented 2,272 amendments to the text. Approved by the CMO, the proposal will be analyzed in a session of the National Congress before going to presidential sanction.