MercoPress. South Atlantic News Agency

Brazil Commission Passes Reform Bill, Workers Protest

In a victory for President Luiz Inacio Lula da Silva, a Brazilian Congress commission passed a bill to cut public pension benefits on Wednesday after civil servants clashed with police in protest against the changes.

As legislators prepared to vote on the bill, armed riot police carrying shields and batons scuffled with civil servants as they tried to enter the lower chamber of Congress to protest for a second day.

Some police officers entered the Congress building, enraging opposition legislators, who cited a constitutional prohibition on carrying arms inside Brazil's legislature, which delayed the commission vote.

Passions among civil servants have run high ever since Lula, who came to power in January, pushed ahead with his reform of the debt-ridden public pension system. The effort has sparked strikes and alienated a group that for years was one of the most faithful supporters of Lula's Workers' Party.

But when legislators finally voted on the bill, the government's proposal was passed in full, with amendments on the most contentious issues struck down. Just eight of the 38 members of the special commission voted against the proposal, legislators said.

Lula's drive to reform public pensions is being closely watched by investors who want to see the government reduce its high costs and ultimately boost growth in Latin America's largest economy.

Lawmaker Aldo Rebelo, the government's chief whip in the lower chamber, said the reform should proceed next week to a floor vote, where it could still face stiff opposition.

Brazilian civil servants have generous benefits, including pensions equal to their last salary at retirement. That has contributed to Brazil's debt burden of about $240 billion.

Last year, the government spent 5 percent of gross domestic product on public pensions.

It is now proposing to raise retirement ages, impose a levy on the pensions of retired workers and cap the pensions of future civil servants at $845 per month.