Brazil top court frees welfare aid from spending cap
A decision by Justice Gilmar Mendes, of Brazil’s Supreme Court, stipulates that the resources earmarked for the payment of welfare programs to combat poverty—like the Bolsa Família—may lie outside of the spending cap. The decision, made Sunday evening (Dec. 18), grants a request from the Rede Sustentabilidade party.
In Gilmar Mendes’s understanding, the cap must not be “conceived as an end in itself,” hindering the release of resources for “fundamental constitutional rights.” “In this connection, there is an urgent need to develop similar welfare mechanisms to facilitate the creation, implementation, and expansion of social public policies by all federal agencies,” the ruling reads.
Another point mentioned is that the cap law itself already outlines ways to make fiscal leeway to fulfill the government’s social responsibilities.
Congress
The move comes amid difficulties faced by the elected government to pass the so-called transition bill in the lower house. In addition to budget for cash transfer programs, the piece of legislation—already approved by senators—aims to recompose the budget for a number of ministries, also outside the spending cap. Representatives should vote on the matter this week at a floor session.
The bill establishes that the incoming government will have BRL 145 billion above the ceiling—BRL 70 billion to be used for the welfare aid (BRL 600, plus BRL 150 per child up to six years old). The piece also opens fiscal leeway for another BRL 23 billion in investments for two years—and not four years, as the transition team originally planned.
In the lower house, representatives argue for the validity of the text for one year. Another change under discussion is an even smaller amount than the one approved in the Senate, slashing the ceiling value from BRL 175 billion to BRL 145 billion.
