TCU sees a ‘snowball’ effect with the Precatorios PEC and a cost that could reach 2% of GDP in 2027

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The Federal Court of Auditors assessed that there is a fiscal risk due to the fact that the PEC has dammed up spending on writs. Ministers made the alert, but understood that there is no punishment. The Federal Court of Auditors (TCU) recognized, this Wednesday (19), the “snowball” effect of the PEC on Precatories, which limited the payment of these judicial decisions by the federal government until 2026. government and recognized by court decision, which can no longer be appealed in court. The proposed amendment to the Constitution (PEC), was approved in 2022, and allowed the government of then President Jair Bolsonaro to open fiscal space and promote the Auxílio Brasil program in the amount of R$ 600. The text set, until 2026, a limit for the payment of federal precatorios. But the dammed amounts must accumulate to be paid in 2027. According to a TCU report, the measure could cost from R$ 121.8 billion to R$ 744.1 billion that year, about 2% of GDP. In judgment this Wednesday, the Court of Auditors admitted the existence of fiscal risk because of the enactment of the text, but decided not to apply punishments. “In view of the existence of a fiscal risk of this magnitude, it seems appropriate to consider this representation partially valid, however, it is unnecessary to adopt other measures in these records”, wrote the rapporteur of the case, Minister Antonio Anastasia. The minister, however, said that the decision does not prevent “possible fiscal risks related to the implementation of the approved amendments from being examined by this Court of Accounts in future control actions”. Accumulated amounts In 2022, pursuant to the PEC, the payment limit for precatorios was R$ 19.87 billion. But the total volume in the queue was R$42.17 billion. R$ 22.31 billion remained for future payments, which must be corrected for inflation. For 2023, the limit is BRL 17.1 billion, but the debts are BRL 73.99 billion — considering unpaid debts for 2022. This means that, by the end of 2023, the government will have accumulated a debt of R$ 56.85 billion. In practice, the Precatorios PEC generates an accumulation of debts over the years in which there will be a payment limit. Debts will only be executed in full from 2027 – when the limits expire. What motivated the action at the TCU The process at the TCU started with a representation by deputies Fábio Trad (PSD-MG) and Professor Israel (PSB-DF), who requested an assessment of the budgetary and fiscal risks of the measure. TCU’s technical area had asked the then Ministry of Economy to make projections of precatories payments for the period from 2022 to 2026. However, the folder stated that the expenses had “unpredictable behavior”. TCU Recommendations This Wednesday (19), the Court of Accounts recommended that the Ministries of Finance and Planning and Budget make annual projections of accumulated debts. The Court also warned the National Congress about the obligation to form a mixed commission, within one year, to analyze public policies with the potential to cause precatories and judicial decisions unfavorable to the Union. The one-year term ended on December 15, 2022, but the commission has yet to be created.

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