The budget was approved by parliamentarians last week and, until this Wednesday, had not been sanctioned by Bolsonaro. The text has been criticized by experts and even by the government’s economic team for allocating less funds than necessary to cover mandatory expenses, such as salaries and social security benefits.
According to the letter sent by Bittar, the R $ 10 billion canceled in amendments will serve to cover these mandatory expenses or to carry out “recompositions in the form that the federal government deems appropriate”.
- Understand the controversy surrounding the 2021 Budget
Parliamentary amendments are expenditures included by deputies and senators in the budget – works in their electoral holdings, for example. These nominations can be made by each member of parliament, by thematic commissions or by state benches.
The cut of R $ 10 billion suggested by Bittar affects the so-called “amendments of rapporteur”, that is, expenses included by himself in the budget piece after receiving suggestions from other parliamentarians. The budget approved by Congress foresees R $ 26.46 billion in amendments by the rapporteur.
In the letter, Márcio Bittar indicates that the cancellation will be made after the sanction of Budget 2021. The deadline for the sanction is April 22.
Budget may paralyze the Union, economists say
The destination of these rapporteur amendments was defined during the passage of the budget bill in Congress.
Almost all of this R $ 26.46 billion was originally intended to honor mandatory federal government expenditures such as social security benefits, salary bonuses and unemployment insurance.
In the version approved by Congress and sent for sanction, this money went to other destinations – R $ 10.2 billion for works of the Ministry of Regional Development (MDR) in the states, for example, and R $ 8.6 billion for actions of health.
Congressional technicians evaluated the measure as a “maneuver” to include, within the spending ceiling, expenses of interest to parliamentarians.
In the craft, the Senator blamed the government and said that these adjustments in the final report were requested by the Executive.
“I must point out that the aforementioned programs that will be canceled refer to those requested by the Executive himself, allocated in the areas of infrastructure, regional development, citizenship, justice, agriculture, tourism and science and technology”, says the parliamentarian .
Monica: ‘They did not approve the budget, but a fiscal mess’
The cut of R $ 10 billion in parliamentary amendments is significant, but, according to the economic team, it is not enough to resolve the 2021 Budget knot – which remains impossible to fulfill.
In an attempt to solve the problem, the Ministry of Economy debates whether President Jair Bolsonaro should veto part of the 2021 Budget and, thereby, reduce the volume of amendments.
Then, the government would still need to send Congress a new bill to change the budget and recompose the mandatory expenses that were cut, that is, to reestablish the allocation of resources for social security and other mandatory expenses.
The parliamentary amendments that resist all this relocation, according to the proposal of the Ministry of Economy, would be funded by cutting other discretionary expenses, such as investment forecasts.
This whole plan comes up against an additional obstacle: the so-called “free spending” of the government are at the lowest level of the historical series of the Treasury, which started in 2008. Therefore, for the economic team, the cut in the amendments will have to overcome this house of R $ 10 billion suggested by Bittar.
Approximate values (including amendments) adjusted for inflation; estimate for 2020 does not consider Covid’s extraordinary expenses
Source: Ministry of Economy
At this level, say the technicians of the Ministry of Economy, there is a real risk of paralysis of the public machinery. To remove this risk, it would be necessary to further reduce the budget to finance works of interest to parliamentarians.
The Independent Tax Institution (IFI), linked to the Senate, estimates that the total cut required is R $ 31.9 billion. Since 95% of the budget is made up of mandatory expenses, the scope for cuts is small.
The current version of the Budget foresees only R $ 92 billion for discretionary expenses in 2021. And even before all the reorganization around the amendments, the Ministry of Economy had already informed that it would need to limit (block) R $ 17.5 billion in expenses not mandatory to respect the spending ceiling. Therefore, R $ 74.5 billion remain.
If all this “necessary cut” of R $ 21.9 billion is also made in free government spending, only R $ 52.6 billion would be left for investments and funding from public agencies.
The amount is insufficient. According to the secretary of the National Treasury, Bruno Funchal, at least R $ 70 billion is needed to maintain the functioning of the public machinery.
FEDERAL BUDGET PROPOSAL FOR 2021
Get the latest news delivered to your inbox
Follow us on social media networks