Second semester should be more difficult for Haddad – 07/25/2023 – Bruno Boghossian
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Few people sang victories in the first months of government like Fernando Haddad. With Lula’s blessing, the minister took control of the economic agenda, cut out intermediaries and negotiated with Congress to advance his platform. Waters in the second half may not be so smooth.
The fiscal framework and the tax reform sailed with speed because they converged with the interests of parliamentarians. It’s not that the minister wasn’t skillful in the articulations to approve the proposals, but the congressmen also wanted to show service in the area.
Goodwill may not be the same in the next steps. Haddad’s agenda depends on measures that force a rapid increase in tax collections and facilitate his promise to close the hole in the government’s accounts. Politicians on the left and right turn up their noses at one part of the equation or another.
A signal was issued in the middle of the parliamentary recess by Arthur Lira, de facto leader of the centrão. The president of the Chamber said that Haddad’s proposals to change rules for taxing income and investments of the super-rich is “a big risk”.
An ideological component explains part of the resistance. The centrão identifies the proposals as items on a left-wing agenda, and no position in the government should eliminate the right-wing vocation of these parliamentarians in the economic agenda.
The rest is politics. The centrão massively supported the tax reform, knowing that the proposal involves a long transition, but not the entire group is willing to deliver the immediate results of an increase in tax collection. It would be more profitable, according to the logic, to negotiate in stages the breath granted to the government.
Other suspicions are at home. A wing of the PT rejects the idea of zeroing the account deficit in 2024 because the measure limits the group’s preferred tool to stimulate the economy, which is government spending. The fear is that the difficulty in increasing revenues will lead the Treasury to tighten expenses.
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