the rapporteur proposes the “dribble” in the law of fiscal responsibility

In his report from the PEC de precatório (23/21), presented to the Committee on Constitution and Justice (CCJ) this Wednesday (24), Senator Fernando Bezerra Coelho (MDB-PE) made changes that make Auxílio Brasil program permanent and, at the same time, it exempts the federal government from presenting financial compensation to fund the program – thus bypassing a requirement of the Fiscal Responsibility Act (LRF).

The Pode, PSB, PSDB and Progressistas parties asked for their opinion after reading Bezerra’s report. The changes made by the rapporteur of the dossier aim to obtain greater support from parliamentarians for the PEC. To be approved, the proposal needs 49 votes from the 81 senators, in two rounds. The proposal is expected to be voted on by the CCJ this week and by the House plenary next Tuesday (30).

Considered the primary regulatory framework for public spending, fiscal responsibility law requires that, in order to fund a program of this nature, of a permanent nature, the federal government must reduce budgetary outlays or increase revenues. And it is necessary to indicate exactly what will be the cut or where the money will come from.

Bolsonaro would like to increase the benefit of the social program from R $ to “at least” R $ 400 by December of next year. But, for the moment, without a source of funds, the average value of the Auxílio Brasil ticket will be R $ 217.18 per month. The PEC report, however, provides for permanent aid of R $ 400 beyond 2022.

“There is no doubt that there is a need to open up fiscal space in the spending ceiling to house a robust new social program, both in terms of the size of the target audience served and in terms of the monthly value of the benefits made available. families ”, defended the rapporteur of the PEC.

“There is no doubt that the new social framework which is being designed will alleviate the current financial difficulties of a large contingent of the population, positively impacting the reduction of income inequalities, which has been a problem observed in the country for a long time. and needs solutions. However, as we know, Brazil is not limited to this, ”said Bezerra.

Unsuccessfully, the government tried to find a permanent source of funds

The executive, in part, obeyed the LRF when it defined that the official source of funding for the program in its first two months of operation would be the increase in the Financial Transactions Tax (IOF). But this is a temporary measure. Since the program will be made permanent, it is necessary to indicate a financial compensation, that is to say a definitive source of funds.

Unsuccessfully so far, the government first attempted to define the taxation of dividends, as provided for in the income tax reform, as a source of funding for Auxílio Brasil in Brazil. But the proposal has stalled in the Senate and is not expected to make any progress in the House.

To defend his opinion and against criticism that he violates the Fiscal Responsibility Law, Bezerra argues that the constitutional amendments overlap with the law, so that the requirement to indicate a source of funds to finance the permanent program would be lifted. .

“The government wants to comply with all applicable laws. It requires that for each new expenditure and expenditure increase, a source be indicated. As we approach the nature of the program through a constitutional amendment, the interpretation is that this requirement would be met at the start of Auxílio Brasil’s funding program, “the congressman said in an interview with reporters on Tuesday. (23).

The rapporteur’s opinion also provides for the creation of a committee in Congress responsible for auditing the development of court decisions and payments from year to year. “The need for the National Congress to control in an institutional and targeted manner all the acts which give rise to these pecuniary obligations is obvious”, proposes Bezerra.

“The commission acts in cooperation with the National Council of Justice, which can request information and documents from any of the powers of the Union, states, the Federal District and municipalities. Once the work of this commission is completed, its results will be transmitted to the competent organs of the organs, ”the report said.

Stamped resources for Brazil Aid and INSS

In his report, Bezerra also “buffers” additional resources to the 2022 budget that could come with the approval of the PEC, so that they are compulsorily allocated to Auxílio Brasil and the readjustment of mandatory expenses, such as the payment of INSS benefits. Thus, it would not be possible to use the money to readjust the salaries of civil servants, as Bolsonaro promised.

“It was a manifestation of many senators, in the sense that the fiscal space is linked to Auxílio Brasil in the first place, and linked to expenses linked to the value of the minimum wage,” said the PEC rapporteur.

The preventive prioritization of Fundef and the new rule for correcting ceilings are maintained

Bezerra maintained in its report the provisional priority for the payment of part of the court orders relating to the former Fund for the maintenance and development of primary education and the enhancement of education (Fundef) in 2022. This priority was decisive for the CEP to be approved in the Chamber of Deputies.

Instead of staying in the “classic” queue for the payment of court decisions, these debts will be paid more quickly than the others, in three years. Together, four states are entitled to receive approximately R $ 16 billion in court orders related to Fundef. The representatives of education plead for 60% of the amount owed by the Union to go to teachers, which represents 9.6 billion reais.

In this regard, the member of Congress included in the PEC a provision for the precatório paid to teachers to be made up of salary bonuses, preventing, for example, the resources envisaged for the retirement of teachers.

The member of Congress also retains in his text the deferral of payment of a good part of the precarious that the government should pay next year, and at the same time modifies the rule for correcting the expenditure ceiling, the country’s main budgetary anchor. . The annual payment ceiling of 40% of the amount of court orders until April 30, 30% of the amount until August 31 and 30% of the amount until December 31 is established.

As for the annual correction, it will be based on the variation in the general consumer price index (IPCA) from January to December of the previous year to which the finance law refers.

Other changes in the CEP

Another change incorporated in the text of the PEC modifies the deadline for sending the precatório to be included in the annual budget bill (PLOA). The limit, which is currently July 31, would become April 15 of each year.

The new wording of the proposal also allows the creditor of court orders to have “more options to enjoy his right to credit.”

The judicial holder can choose to use the credit from which he benefits to “pay off debts staggered or recorded in active debt of the debtor entity, buy public real estate available for sale, pay for the granting of public service delegations from debtor entities, acquire an interest in the debtor entity and purchase rights from the debtor entity placed for disposal, including, in the case of the federal government, anticipation of amounts receivable under the excess oil in oil sharing contracts ”.

According to Bezerra, in his opinion, “in general, the compensation assumptions have a positive effect on the respect of the spending limit at the federal level, because the offsetting of debts and credits avoids the payment of expenses with court rulings, which , since it is a primary expenditure, reduces the fiscal space to assume other expenses of the same nature “.

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