MercoPress. South Atlantic News Agency
Brazil's Lower House approves by ample margin amendment to freeze spending
Brazil's Lower House of Congress approved on Monday a document which is the base for a Proposed Constitutional Amendment (PEC) that would freeze federal spending for the next 20 years, a legislative priority for Michel Temer's government in 2016. Read full article
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Disclaimer & comment rulesMaking laws now to limit government spending in 20 years' time? How is that a good idea? Anything could change. And setting the floor for health and education based on next year's completely unknown figures seems pretty risky too.
Oct 12th, 2016 - 09:21 pm - Link - Report abuse 0Also anyone want to bet on how much resemblance the IPCA will have to reality in 10 years' time? I'm guessing it'll make CFK's inflation figures look as accurate as Switzerland's...
The Law has put a cap on Govt spending for 20 years (long-term planning, in order to have a target), but one thing that is not being divulged forcefully enough by the Press, and being downplayed or distorted deliberately by the opposition (the PT , PCdoB, PSD), is that IF the economy picks up, there is nothing to prevent the same Congress, say in 3 years time, from presenting another Constitutional amendment to alter what's being decided now. It's only logic - if the economy does pick up, so does the GNP, and along with it, the revenue that determines the yearly budget - which in turn will provide more funds for the various sectors. If education today, is being limited to 15% of the budget, and if projected revenue starts to increase, this implies that so will the funds destined to education (and health) ; the 15% will increase proportionately, in absolute terms. And just as a matter of guidance, the 15% earmarked for education in 2017 (provided the amendment is eventually approved in all stages through Congress) is R$ 9 billion higher than the current budget for 2016.
Oct 13th, 2016 - 10:37 pm - Link - Report abuse 0On the other hand, if the Govt does to not get spending under severe control, in 5 years the country will be totally broke, and no one will receive anything....And one of the main reasons to curb spending', is the retirement and pension system, which currently produces, if not mistaken, a yearly deficit of US$ 40 billion, covered by the Treasury. Fraud is rampant - in the case of pensions received by people considered unfit for work, for any reason, 8 out of 10 pensions are fraudulent.
Also, this reform will address the unfair practise of public servants retiring on full salary, whereas the the private sector, has to respect a ceiling, usually a mere pittance of the salary earned while active. There is a lot wrong, and it has to be corrected. Decades of ignoring the problems has lead to the current mess.
I'm not an expert on constitutions, but aren't they supposed to be about how the government works, and the general rights of the people, rather than specific laws?
Oct 14th, 2016 - 10:46 pm - Link - Report abuse 0What is the purpose of passing the law, if it can easily be overturned later? Does the current government think a future PT administration would have difficulty getting a 3/5 majority?
And I understood from the article, that government spending is being limited according to inflation, not whatever the budget is. Which would mean it would be limited even if/when the economy picks up again. So which is it?
Are you serious that public sector workers get their full salary when they retire? That is crazy!
But if the main spending problem is the pension system, why doesn't the government just limit that, rather than including everything? And what do you think of the suggestion in an earlier article that the spending cap could interfere with the corruption investigations?
Neither am I, but I can remember when the 1988 Constitution was passed, the detail it went in to was absurd, reaching the point for example, of regulating how public schools had to feed the kids during the mid-morning break.
Oct 15th, 2016 - 10:38 pm - Link - Report abuse 0But in this particular case, as the current PEC 241 affects the Federal Budget, which is directly linked to the Law of Fiscal Responsibility - regulated by the Constitution - it is only normal that this 'cap on spending' be approved by a majority of 2/3 in both houses of Congress. Putting it simply, it means that the Govt cannot spend what it doesn't have, in order to avoid accumulating unmanageable deficits...very sound policy. And, as I said above, what's been decided now, can be changed in the future, whenever the Govt sees fit. Paraphrasing “Vinicius de Moraes” (Brazilian singer/songwriter), where he says, “love is eternal while it lasts”, the same can be said about PEC 241, ”the ceiling of PEC 241 is eternal until it's changed.
The purpose is to regain trust from the international community, in that Brazil is seen to be doing it's homework in order to get the economy back on track. As to the possibility of it being overturned at a later date - which should depend only on the economic situation - this won't happen before the end of 2018 (new presidential election), and hopefully not too soon after that, as to avoid letting the economy go down the drain again, the Govt has to be responsible and cut the populism crap.
The mismanagment of public funds and corruption are common to just about every public agency, on all levels of Govt (Federal, State, Municipal), so the PEC 241 should force the elected officials to act responsibly (hopefully). If they don't, it should be easier to convict them.
The public servants' pension rules are indeed absurd, and despite Laws passed in recent years, they only partially addressed the problem, and didn't cut deep enough. But funds for investigations shouldn't be affected.
Wow, that really does seem like something that does not belong in a constitution. I wonder if they were inspired to put that in by tales of 'Thatcher milk snatcher', LOL.
Oct 16th, 2016 - 09:54 pm - Link - Report abuse 0Not spending what you don't have certainly sounds sensible, though most governments seem to ignore this and have ever-increasing national debts.
But I can see why it would be useful to convince other countries they are serious about dealing with the problem, and to have a consistent policy for a while. Plus I suppose you are right; if and when the economy improves it shouldn't be that hard to reverse the law again.
Doesn't the amount allowed for education depend on the unknown of how the economy is performing next year though? It still seems risky to gamble on it like that.
And I really hope the government are not able to hobble the corruption investigations, as it appears they are still trying to do. It seems to me that when they were writing that constitutionn in 1988 they should have put more thought into preventing corruption and less into micromanaging school dinners.
The 1988 Constitution was passed 3 years after the end of military rule, and with all the 'exiles' coming back to Brazil, the Constitution was greatly influenced by human rights and liberal movements, and in a perverse manner, ended up including all sorts of “protection” for the politicians, if ever caught red-handed. That's why they can only be tried by the Supreme Court, and if condemned, can keep on appealing for years; and only after all appeals have been exhausted, can they be imprisoned. But all this changed in a recent decision by the Supreme Court, whereby it was reconfirmed that the defendant - politician or other - will be jailed after being condemned by a court of 2nd instance. Obviously, the politicians who relied on an inefficient Judicial system, expecting to never be brought to Justice, and if they were, counting on the process to drag on for years, many times until the crimes prescribed, are now crapping themselves.
Oct 17th, 2016 - 05:39 pm - Link - Report abuse 0PEC 241 has put a cap on total spending, i.e., a ceiling limited by Govt revenue but there is nothing to stop them from reshuffling spending from one area to another, depending on the needs. But if the Govt shouldn't spend what it doesn't have, it is possible that education, along with the other priority sectors, could be affected. So what's the alternative ? make sure that the economy picks up, increasing the GNP, and revenue, enabling the increase in funds for all sectors, without having to take from one to cover another - or, the 'short blanket' syndrome. That is the challenge Temer is facing.
The investigations being carried out by the Federal Police and the General Attorney's office should carry-on being funded normally, for the simple reason that - besides putting the crooks in jail - it reduces further corruption. Those who are against the investigations and are actively trying to obstruct them, are slowly but surely being weeded out...Lula for one, whose imminent arrest is being rumoured
@ Jack Bauer
Oct 17th, 2016 - 10:22 pm - Link - Report abuse 0That is interesting. They were trying to limit the power of the state over everyone? Was there a fear that politicians might be harassed by spurious accusations of crime or something?
It does show how hard it is to avoid unforeseen consequences, but at least they are being prosecuted now. Is it going to reduce further corruption or just make them more careful though?
I hope Temer is able to improve the economy. It sounds like Brazil depends a lot on China, and China is probably still slowing down unfortunately.
Stealing is “frozen” too?
Oct 18th, 2016 - 01:41 pm - Link - Report abuse 0Not sure when implemented, but well before the 1988 Constitution, the politicians had immunity from prosecution for expressing their opinions freely, but as time went on, this protection was increased, to cover virtually any crime, even homicide, unless caught in the act. They legislate on their own salaries, their benefits, and anything else which keeps the arm of the Law at a distance. The whole idea is to create obstacles which prevent them from being brought to justice. As the average Brazilian, until recently, besides not being too well informed and not at all politicized, was very complacent when it came down to corruption...it was taken for granted and not many gave it a second thought. So you can imagine that the operation “Lava-Jato” has been an eye-opener for many Brazilians...and foreigners, who had lost hope that things would ever change.
Oct 19th, 2016 - 08:59 pm - Link - Report abuse 0When the PT came to power in 2003, they inherited a favorable economic situation, and the economic boom of 2004/5 helped Brazil get ahead, despite the fact that the PT did not know how to capitalize on it. Once the boom ended, the PT resorted to populism to maintain their popularity, and as long as the revenue was sufficient to cover the ever-growing spending - and not on infrastructure - the people were kidded into thinking that everything was fine. In 2005, at the end of Lula's first term, the “mensalão” corruption scandal exploded, and the opposition actualy considered impeaching Lula, but “for the sake of governance” they let the opportunity slip through their fingers. It was then, that Lula, in an effort to survive, had to “embrace” the PMDB, and bring them into the Govt. That's when Petrobras was “divided up” and the various directorates shared between the PT, PMDB and the PP. The “mensalão” was only tried in 2012, sending some top ”petistas' to jail, but Lula managed to escape - only because Dilma was in power ; the rest, we are all familiar with.
@ Jack Bauer
Oct 20th, 2016 - 11:03 pm - Link - Report abuse 0It sounds pretty broken, letting the politicians give themselves immunity. Setting their own pay is bad enough! Although they obviously hadn't quite managed to finish the job if many are being investigated now.
When you say Brazilians were complacent about corruption, do you mean they thought there wasn't any or that they were so used to it they hardly noticed?
And when Lula brought the PMDB into government, they took a share in the corruption schemes too? It's a pretty depressing story.
The “Lava-Jato” investigation has gotten rid of a few old taboos, such as politicians suspected of corruption were never investigated...
Oct 21st, 2016 - 07:10 pm - Link - Report abuse 0Regarding the Brazilian's complacency towards corruption, they were aware alright of the dirt going on behind the scenes, but not to the extent they've discovered over the last 2 years. As a result, they never really did anything about it, until the news of massive corruption (Petrobras) hit the fan...only then , did they wake up to the fact that the PT - and others - were siphoning off billions, and that it was “their” money that was being stolen - which was reinforced by the perception that public services were literally becoming non-existent. Obviously, under the PT, all economic indices were manipulated, and this carried on until they were unable to make ends meet (2013/14).
Lula invited to PMDB into the Govt, and bought their silence by giving them several Ministries, which then made it possible for them to get their share of the cake as well...so in practice, Lula bought himself some more time. Everyday something new is divulged in the Press, and Lula is already a defendant in 5 or 6 cases (under the jurisdiction of the no-nonsense judge Sergio Moro) and as I said previously, his arrest seems imminent. The PT even created a false rumour that he would be arrested at his home in São Bernardo do Campo, last Monday, to test his popularity to see how many supporters would turn out.....about 28 appeared. Besides the rumours of his imminent arrest, it is also being romoured that he is considering fleeing to Uruguay....to join one of his sons, also facing criminal charges.
@ Jack Bauer
Oct 21st, 2016 - 10:50 pm - Link - Report abuse 0The scale of the corruption is really quite terrifying in both the amount of money and how many people were involved. It's hard to see how Brazilians can ever fix it, but at least they are trying now that they are aware of the problem.
Would Lula be safe in Uruguay, do they not have an extradition treaty with Brazil? Seems odd when they are neighbouring countries.
Also has Rousseff been charged with anything? So far she seems to be one of the few who wasn't taking anything for herself, although she had to have known about it all.
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