How will the government finance the new Bolsa Família without exceeding the ceiling?

The government plans to launch the new Bolsa Família in November. Photo: Ana Nascimento / MDS

The federal government wants to increase the average benefit that will be paid by the new Bolsa Família, now at R $ 192, to “at least”, in the words of President Jair Bolsonaro, R $ 300. November 2021 the social program.

But how the government will finance resources without exceeding the spending limit is still an unanswered question among scholars and economists. One of the strategies, indicated by the Minister of Economy, Paulo Guedes, is to buffer dividend tax resources, with the income tax reform, and to direct them towards the program.

A pledge to increase the average amount payable to beneficiaries would generate a public bill of at least R $ 50 billion. “As we are a stamping country, we will have to take the dividends and say that part will be permanent for Bolsa Família. It is easy to pay the extra 20% that the program needs, it could be even more, but we sums are not going to increase that much, let’s only increase a little, “Guedes said in an interview with Valor.

A bill sent by the executive to the National Congress makes an exception to the budgetary responsibility law (LRF) and modifies the budgetary orientation law (LDO) of 2021, allowing the government to commit resources still under discussion to direct them to a social program. That is, even before the funds are obtained.

The idea is that the resources resulting from the reform of the income tax – which, if approved, should tax the distribution of dividends, currently exempt – at 20% – support the new social program which will be launched by the federal government. In practice, the legislative proposal amends the law to allow expenditure related to income transfer programs to “fight extreme poverty and poverty”, such as the new Bolsa Família, to be considered as compensation projects that are still ongoing in Parliament.

“There will be at least 200 billion reais collected. We have to leave a notice that we are going to turn to Bolsa Família to, subsequently, stamp the dividend money and say that it will finance the program, without breaking the law. on fiscal responsibility and in the spending cap. Economists would say you can’t use a transitional increase in revenue to fund permanent spending, but it’s not transient, it’s just a comeback, ”said the head of the economy to the vehicle.

Capitalization of Eletrobras “link” resources for the social program

Another strategy tried by the federal government to finance the new social program was to tie the resources of the capitalization of Eletrobras to the initiative.

The deputy 1,031, already sanctioned by the president, establishes that from 2023, when the loans and financing of Itaipu – which will not be privatized – will have to be repaid, 25% of its possible financial surplus will be allocated to the “program social security of the federal government “unspecified.

The rapporteur of the proposal to the House, Elmar Nascimento (DEM-BA), said in his opinion that, out of the average cost of the energy supplied by the plant (US $ 42.37 per megawatt hour in 2019), 48, 9% (USD 20.71 per MWh in 2019) is used to amortize loans and financing.

On the 22nd, during a press conference to announce the release of approximately R $ 4.5 billion from the budget, Bruno Funchal, secretary at the Ministry of the Economy, declared that there was room in the spending limit to finance a Bolsa Família close to R $ 300. .

“After the updates of the macroeconomic forecasts and taking into account the fact that personnel and social security expenditure are today the biggest accounts of the government, it is estimated that, if there are no more surprises, the Cap margin should be between R $ 25 billion and R $ 30 billion. This would give (to the Bolsa Família) a margin to reach almost R $ 300, but this ends up compressing the space for other investments, ”said Funchal.

The forecast of a leak in the public accounts went from 2.2% to 1.8% of the Gross Domestic Product (GDP). The government has also revised the estimate of the Union’s primary income to BRL 1.8 trillion – slightly above the figure announced in May at BRL 1.7 trillion. The estimate of primary expenditure, meanwhile, amounts to 1,632 billion reais, against 1,620 billion reais announced in the last survey.

New family grant

As for the new program, expected in November, there should be substantial adjustments in the structure of benefits. That is to say, its scope must be broadened and the basket of benefits simplified.

“The proposal will also maintain the ideal of emancipation of families, aimed at ensuring that those who gain autonomy, allow new families in vulnerable situations to benefit from it”, indicates the government in PL.

While seen by many interlocutors as a strategy by President Jair Bolsonaro’s government to build political support for the 2022 elections, the new agenda actually follows a Federal Supreme Court (STF) ruling.

In April this year, the Court tightened its grip on the federal government to comply, obligatorily from fiscal year 2022, with Law 10 835/2004, approved 17 years ago, but never regulated. . The STF decision determines an unconditional basic income transfer policy for the strata of the Brazilian population in a situation of vulnerability (extreme poverty and poverty). The law is drafted by former senator and current São Paulo councilor Eduardo Suplicy (PT).

“Thus, the implementation of the basic income of citizenship is ensured, gradually, with a reach and a reach achieved gradually, by stages, from the year 2021, by privileging the most deprived layers of the population”, admits the government in the PL sent to Congress about the new program.

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