Brazil lower house approves 20-year government spending cap

After more than seven hours of discussions and obstructive motions from the opposition on Tuesday (25 Oct), the Chamber of Deputies held a second-round vote and approved the main draft of a constitution amendment bill (PEC 241) that aims to limit annual increases in government spending to the inflation rate of the previous year, for 20 years. The proposal was approved by the lower house by 359 votes in favour, 116 against, with two abstentions.

Brazilian parliamentary procedure requires constitution amendment bills to pass two rounds of voting in each congressional house to be approved. Now that it has been approved by the Chamber of Deputies, the proposal will also need to be discussed and voted on the Senate floor.

Deputy André Moura, leader for the government, said limiting spending is critical to revive Brazil's growth and employment and overcome the recession.

But the opposition has criticised the proposal since it came into discussion, arguing the spending cap will cut down funding from social and welfare services, especially in health and education. Government allies contend that the proposal will not impact funding for priority areas and there will be no cuts in health and education.

Temer celebrates

President Michel Temer thanked the deputies and parliamentary leaders for passing the austerity proposal and insisted the changes will not impact “essential” areas like health and education.

Through Spokesman Alexandre Parola, Temer said he watched the voting session with “great satisfaction.”

“President Michel Temer further notes that, in conversations with congress members and political leaders, he has always made it clear that key sectors, such as health and education, are, and will be, preserved by the PEC, and by a government that makes responsible social investment an unswerving part of its priorities,” Parola said at the presidential Planalto palace minutes after the voting of the proposal was over.

According to the spokesman, fiscal responsibility is a form of respecting taxpayer money, “which must be used efficiently and transparently for the benefit of all.”

Translated by Mayra Borges