“Secret budget” under Lula and amendments boost Congressional power

President Luiz Inácio Lula da Silva (PT) said, after his election, that the so-called secret budget, or rapporteur’s amendments, was “the greatest banditry ever committed in 200 years of the Republic”. After eight months of government, the instrument acquired a new guise, boosting Congress’ power over the budget.

According to a survey by the parliamentary advisory of the Partido Novo, this year the parliamentary amendments (R$ 36.5 billion) added to the R$ 9.8 billion redistributed from the secret budget will represent 23% of the government’s total discretionary spending, that is, the money the Executive is free to spend as it pleases. The ratio is 6.3 percentage points higher than that recorded in 2022.

The data take into account the budget execution of previous years and the payment forecast until December of this year, already considering the funds distributed in new headings, after the decree, by the Federal Supreme Court (STF), last year, of the unconstitutionality of the amendments of rapporteur (RP9), which constituted the so-called secret budget.

According to the survey, the increase in the volume of amendments by the Legislative branch intensified from 2014 onwards, when new types of amendments emerged. First there were the individual (RP6). In 2018, the Commission amendments (RP8) and in 2020 the rapporteur amendments (RP9).

The volume allocated to amendments, in 2014, represented 0.09% of the total discretionary. In 2022, the sum of individual amendments, state benches, commissions and general rapporteur (RPs 6, 7, 8 and 9, respectively) represented 16.91% of the same budget. “It was already a gigantic leap”, evaluates deputy Gilson Marques (Novo-SC).

For this year, the forecast is that they will reach 23%, that is, approximately R$ 45 billion, of the total of R$ 195 billion in the discretionary budget. “Congress is getting more expensive”, notes the deputy.

Parliamentary sources linked to the budget point out, however, that not all appropriations are effectively transferred and paid at the end of the fiscal year. But the increase in the percentage is an unequivocal indication of the increase in instruments for parliamentary amendments.

“Centrão” parties charge more to support government

The background to this scenario is the attempt, by the Lula government, to increase its allied base to guarantee the approval of agendas of interest to the Executive in Congress. In addition to amendments, the price of the so-called “Centrão” parties for supporting the PT administration involves first and second-level positions, which has led to the mini-ministerial reform soap opera that drags on without definition.

Lula still hasn’t got a format to guarantee the survival of his PT ministers and accommodate the demands of opposition parties that covet some of the most prominent ministries, with large budgets and potential for amendments to be distributed.

The secret budget was so named because it transferred federal resources to states and municipalities without any criteria for distribution or transparency regarding the authors of the amendments. The STF declared the instrument unconstitutional at the end of last year, but Congress managed to recover, through legislative maneuvers, the funds foreseen for the 2023 Budget.

Of the total of these resources, of R$ 19.4 billion, half went to the control of the ministers of State of the PT administration (RP2) and the other half fattened the individual amendments (RP6) of the deputies and senators, through commissions, whose coordinations were the subject of disputes due to the power of indication of transfers.

In both cases, transparency is not contemplated. Part of the resources was allocated to actions already planned by the previous government or to new programs, without disclosing the beneficiaries.

According to newspaper report The State of S. Paulo, with the inherited resources, the government prioritized the electoral strongholds of the mayor, Arthur Lira (PP-AL), the ministers themselves and other allies. Data from Siga Brasil, a system maintained by the Senate, showed that, in some cases, the money fell into the account of city halls 24 hours after it was reserved in the budget. Normally, the committed money is only effectively paid in the following year.

These special transfers, known as PIX amendments, originate from taxable individual amendments and are not linked to any proposal or agreement for their execution. They are transferred directly to the account of a beneficiary, state or municipality. According to data from the New Party, the modality increased 10 times from 2020 to 2023 and currently represents 1/3 of the total made available by individual amendments.

During the first eight months of the government, Lula also authorized the payment of R$ 2.8 billion in rapporteur amendments that had been pledged in previous years. The STF allowed the payment of these funds, demanding that the government establish technical criteria.

Alagoas, stronghold of the mayor, received 21% of health funds

Of the remaining BRL 9.8 billion in the secret budget, currently allocated in RP2 (discretionary spending under the control of ministries), BRL 2.7 billion has already been committed. Of these, R$ 1.36 billion was allocated by the Ministry of Health, with Alagoas being the state most benefited from these funds.

According to data from Siap, the Union’s main accounting system, the source of the Novo survey, R$ 285 million (21% of the R$ 1.36 billion committed via the Ministry of Health) were sent to municipalities in Alagoas, stronghold of the mayor , Arthur Lira (PP-AL). The amount received was three times greater than that allocated to São Paulo (R$ 85.5 million). According to the newspaper The State of S. Paulothe money was set aside in one day and effectively transferred the next day to the city hall of Maceió, which intermediated the transfer to a hospital managed by a cousin of Lira.

The Ministry of Health argues that the money released is not amended. As a transfer strategy, the portfolio issued Ordinance 544/23, with criteria for municipalities to receive funds. City halls have registered proposals and the government decides where the money goes. Prefectures administered by Lira allies – and which have already starred in secret budget scandals, such as Rio Largo, Canapi and Barra de São Miguel – were the destination of part of the resources.

Another R$ 124 million in funds from the Ministry of Integration were allocated to the superintendence of the Company for the Development of the São Francisco and Parnaíba Valleys (Codevasf) in Alagoas. The organ has been commanded since 2021 by João José Pereira Filho, Joãozinho, who is Lira’s cousin. The money will finance works in ten cities in the state, nine of which are governed by allies of the president of the Chamber.

Mato Grosso, Pará and Piauí are also among the record holders

From the Ministry of Agriculture, of the R$ 277.5 million released in RP2, practically half, R$ 135 million, ended up in Mato Grosso, stronghold of Minister Carlos Fávaro (PSD). In July, the agency allocated R$ 5.3 million for the maintenance of dirt roads in Canarana (MT). At the same time, the neighboring state, Mato Grosso do Sul, which is also an agricultural production center, received only R$ 473,000. And for Rio Grande do Sul, which is also an important agricultural producer, R$ 4.2 million were allocated.

The Ministry of Regional Development transferred to Piauí 42% of the portfolio’s total resources in RP2 committed until the end of August. The budget’s general rapporteur, senator Marcelo Castro (MDB), who is from Piauí, included the funds in the budget piece.

Of the funds for Education, Minister Camilo Santana (PT) allocated half of the portfolio’s money in RP2 to Ceará. It was R$ 4.8 million out of a total of R$ 9.8 million. Jader Filho (MDB), Minister of Cities, prioritized Pará, his electoral stronghold, with 39% of the R$ 146.9 million allocated to the former secret budget. In Social Development, Piauí, state of Minister Wellington Dias, was the third largest beneficiary, with R$ 35.6 million.

All of this happened without transparency about who was really responsible for the nominations. Technically, RP2 expenditures are not parliamentary amendments and ministries have control over their distribution. However, the Lula government has been using the distribution of this money to negotiate with Congress.

website report metropolises recently showed an “accountability” document presented by palace advisers to deputy leaders of parties in the Chamber to demonstrate that the government was meeting the demands of allies in the House. The index included, according to the website, the status of RP2 A4 funds, which are the way in which the R$ 9.8 billion reallocated from the extinct rapporteur’s amendments are identified in the budget.

A parliamentary adviser who declined to be identified in this report claims that the lack of transparency of the extinct rapporteur’s amendments continues to occur through the negotiation of amendments controlled by the Executive and the thematic committees of the Senate. “It is the same logic of the RP9 amendments, declared unconstitutional. The secret budget is bigger and more secret”, he summarizes.

Physiological center will not give up power

For political scientist Eduardo Grin, from FGV EAESP, the difficulties faced by the Lula government and the “more expensive” support is not due to the current composition of Congress, but to changes in the rules that characterize the relationship of powers in the last decade. The most significant milestone, for him, was 2015, when the then President of the Chamber, Eduardo Cunha, approved the mandatory individual amendments by proposal of constitutional amendment (PEC), at the height of the crisis with the government of then President Dilma Rousseff (PT). .

“Until then, the government could pay or not, and at the appropriate time. It had bargaining power with the interest votes. And the government played with it”, explains Grin.

In 2019, the approval of bench amendments, also mandatory, further strengthened the parties. Finally, in 2020, the rapporteur’s amendments, approved in the government of former President Jair Bolsonaro (PL), once and for all changed the balance of power in favor of Parliament.

“This has increased the invoice price”. At the same time, Centrão has taken the opportunity to charge the price for each important vote. “There is a deep sense of opportunism in Congress and it will be difficult to put the genie back in the bottle”, evaluates the political scientist.

For federal deputy Maurício Marcon (Podemos-RS), there is a portion of deputies who were elected based on a conservative image, but which is fundamentally physiological and is imposing “a higher price” for voting with the government. “But there is a non-negotiable part that is not sold for amendments”, guarantees the deputy, who is preparing a project to give transparency and effectiveness to the amendments in his state.

In addition, deputy Nikolas Ferreira (PL-MG) also filed a proposal to bar the distribution of budget amendments to parliamentarians during weeks of important votes in Congress. In July alone, President Luiz Inácio Lula da Silva (PT) released R$11.8 billion in amendments to influence votes in the Senate and Chamber of Deputies.

“The PEC would make it a crime of fiscal responsibility to use this parliamentary amendment with this misuse of purpose”, said the deputy to People’s Gazette. The proposal needs 171 signatures from the deputies so that it can start to be processed.