Transfers of Pix Amendments grow 529% and could interfere in elections

Pix amendments or special transfers made by parliamentarians to their base municipalities increased by 530% between 2022 and 2023, jumping from R$1.5 billion to R$8.1 billion. Without the need for specification of destination or agreement with ministries’ programs and projects, the transfers reach city halls directly, exempt from inspection mechanisms for the use of resources made by municipal administrations.

In addition to being a strategy to boost candidacies, the increase also reflects the increasing trend of control that the National Congress has sought to exercise over the public budget.

Political analyst Lucas Batista Pinheiro, from Consillium Soluções Institucionais e Governmentais, explains that pix amendments influence municipal elections to the extent that, in the pre-election year and in 2024, they are used to boost public works or to boost social programs. These advances end up being positive for allies and supporters of federal deputies and senators (authors of the amendments) who intend to contest the municipal elections.

“Increase [no repasse deste tipo
de emenda] This means that parliamentarians will have a more prominent role in municipal elections, whether as candidates or as supporters. Municipal elections are not defined by ideologies, but by local reality. Whoever demonstrates that they know how to solve the population’s day-to-day problems wins. Therefore, solving the potholes, the asphalt, the health center, the neighborhood school, the lighting, the janitor is a great electoral asset that can be resolved with amendments”, he states.

Cristiano Noronha, master in Political Science and vice-president of the consultancy Arko Advice, also believes that the greater transfer of this type of amendments could help in this year’s municipal election. “Congressmen like to allocate these resources to certain municipalities.” To this end, the resources are used in works and other improvements that give greater visibility to parliamentarians and mayors who are co-religionists or allies.

Municipality of São Paulo leads the ranking of pix amendments in 2023

The municipality of Carapicuíba, in greater São Paulo, was the champion destination in pix amendments in 2023, with transfers of around R$81.43 million – the data are from the website Tesouro Nacional Transparente. In 2022, the city received R$20.05 million in funds of this type, which represents a growth of 406% from one year to the next.

Pinheiro highlights that, in election years or those that precede the elections, “it is natural that parliamentarians and parties want to direct the amendments to their bases, especially to the municipalities that the parties choose as a priority”. In the case of Carapicuíba, it claims to be a strategic city, as it is located in the Greater São Paulo region, where both PT and PSDB are trying to regain control and prevent the advance of the influence of governor Tarcísio de Freitas (Republicans), an ally of the former President Jair Bolsonaro (PL).

The capital of São Paulo also registered growth in transfers, having increased from R$9.59 million in 2022, to R$23.17 million in 2023, a “more modest” increase than that recorded in total transfers of pix amendments, but still therefore, quite significant, around 241%. The country’s political showcase, all the major parties are interested in pleasing the São Paulo base. Even so, the city went from second place in the ranking of largest transfers of this type in 2022, to occupy 17th position in 2023.

The city of São Paulo has one of the fiercest races for mayor this year. According to Pinheiro, Mayor Ricardo Nunes (MDB) has a battle ahead, as he will face the federal government candidate, Guilherme Boulos (PSOL), who now has the support of former mayor Marta Suplicy. On Tuesday (9), she was dismissed from her position as Secretary of International Relations under Nunes’ administration to join the PT and run for election on the ticket supported by President Luiz Inácio Lula da Silva. “This would force the camps opposing Lula to unite in the capital of São Paulo,” she says.

Noronha assesses that the dispute for São Paulo is an emblematic case, where the PT gave up its leadership because it knows it has difficulties in the city. He states that the party “suffered great wear and tear due to allegations of corruption and, at the same time, there was a rise of the right led by former president Jair Bolsonaro”.

Macapá and Rio: increases above what occurred in the country

Unlike São Paulo, whose growth was below that recorded in the total transfer of pix amendments, Macapá (AP) recorded an increase of 544%, going from R$9.29 million in 2022, to R$50.59 million in the year past, remaining in third place in the ranking. The city is the political birthplace of one of the possible candidates to replace Rodrigo Pacheco (PSD) as president of the Senate, David Alcolumbre (União), who is currently president of the House Constitution and Justice Committee (CCJ).

Pinheiro assesses that Macapá is of great interest to União Brasil, since Alcolumbre, one of its main staff, supports the candidacy of Josiel Alcolumbre, his brother and alternate in the Senate, for mayor. Deputy Acácio Favacho, president of the MDB in Amapá, has also allocated resources to carry out works and social programs in the city. However, the current mayor of the municipality, Dr. Furlan, from Podemos, leads voting intentions in the capital and could be an obstacle to the electoral aspirations of both parliamentarians.

Rio de Janeiro showed even greater growth than Macapá, moving from 12th place in the ranking in 2022, with R$5.19 million received in pix amendments, to 7th place in 2023, with R$29.31 million. The increase is 564%, more than 30 percentage points above that recorded in total transfers across the country. In the capital of Rio de Janeiro, the main dispute takes place between the PSD, which will try to maintain control of the municipality with the re-election of Eduardo Paes, who must have the support of Lula, and the PL, Bolsonaro’s party, which could launch Delegado Ramagem as candidate for the election.

Pix amendments give more control of the Budget to the National Congress

In addition to this year’s electoral disputes, Political Science professor Waldir Pucci, from the University of Brasília (UnB), states that the increase in the volume of transfers via amendments, including pix, is a trend in Congress and Brazilian political life. “This increase is linked to the movement of the National Congress to increasingly have control over the Budget and, in particular, over the amendments themselves”.

He explains that, before special transfers existed, parliamentarians indicated individual amendments, which were paid as the government released these payments, as framed in ministerial programs and actions.

With the pix amendments, the opposite occurs, as the parliamentarian makes his indication specifying the city where the resources will go, which, in the category of “special transfers”, do not need to be classified by the ministries in their actions. In this case, the resources are transferred to the municipalities without a defined purpose, that is, without determining that they will be used for construction work, the purchase of equipment, machinery or training, for example.

The municipality can choose what to apply, as long as it is a public policy. These transfers are a type of Individual Amendment (RP 6) and, therefore, are mandatory and have mandatory payment. There are also individual amendments that are not “pix” and need to be linked to specific actions.

Understand what types of amendments are used in Congress

RP6 are just one of several types of amendments used by Congress. There are also bench amendments (RP 7), which can be state or regional and are also binding. Another type is represented by committee amendments (RP 8), proposed by the technical committees of the Chamber and the Senate, as well as by the steering committees of both Houses, but they are not binding. Last year there was a proposal to increase Congress’s power over the budget and also make them mandatory, but the initiative did not go ahead. Only individual amendments have the pix modality.

There are also rapporteur amendments (RP 9) that were prohibited by the Federal Supreme Court in December 2022, except in exceptional cases of budget recomposition. During the government of former president Jair Bolsonaro, they were used by rapporteurs in the Senate and Chamber to allocate resources to parliamentarians and directly to city halls. As the parliamentarian who appointed them did not need to indicate their origin, they became known as the Secret Budget. Still in 2022, the Transition PEC allocated half of the resources that would be allocated for this purpose, R$9.5 billion, for individual amendments (RP 6) in 2023.

In total, R$25.28 billion were allocated to individual and bench amendments in 2023. Of this total, 34% correspond to special transfers or pix amendments, with R$8.1 billion for municipalities and R$624 million for States.

Arm wrestling for control of the Budget

At the end of December, in a controversial measure, Lula approved the Budget Guidelines Law (LDO) for 2024 with a veto of one of the articles widely debated in Congress, which provided for a payment schedule for the amendments. The LDO rapporteur, deputy Danilo Forte (União – CE), on the occasion, stated that he received the announced vetoes with “concern, as they affect the main objective of the LDO of my rapporteur, which is to provide a greater level of predictability, transparency and execution of the Federal Budget” and that he is confident that Congress will override presidential vetoes.

In addition to transparency, the measure aimed to reduce the government’s bargaining power with Congress, because, even though the execution of individual and bench amendments is mandatory, the government still decides when they will be released and plays with this to favor allies .

Noronha explains that, as Centrão elected the largest number of mayors in the country in 2020, unlike the PT, which had the lowest number of mayors in its entire history, support is essential for the approval of measures of interest to the Lula government .

“The National Congress has had greater control over the Budget through the approval of amendments with mandatory payments. Generally, when important votes take place and the government needs to release resources, the cities that are governed by Centrão parties receive a greater volume, which ends up strengthening a cycle”.

He also assesses that it is possible for the PT to increase its representation in these elections, with improved performance in relation to the 2020 election. “But even so, there should not be any extraordinary growth, because in recent times the right has gained a lot of space and the PT ended up reducing the size and number of city halls.”

As the right and the center continue to have broad representation in Congress, this bargain for control of the Budget can continue, with the Senate and the Chamber betting on increasing transfers to their bases through amendments.

“The tendency is that, yes, if there is no drastic change in Brazil’s political direction, the Budget and Amendments will increasingly be in the hands of the National Congress itself, defining its indications and also defining its releases”, says Pucci . He further explains that “the greater this amount and the certainty of payment, the better it will be for the parliamentarian and, mainly, for his supporters, those he supports in the municipal elections”.