Calamity in RS is used in Congress to advance a spending package in the pre-election period

BRASÍLIA – In the midst of the calamity caused by the rains in Rio Grande do Sula package of measures to increase expenses, release parliamentary amendments for other States and benefit sectors beyond the Rio Grande do Sul territory began to take shape in the National Congress. Even the return of emergency aid for disaster victims — and not restricted to rains in RS — was proposed by congressmen.

The aid would be similar to that paid to informal and unemployed workers during the covid-19 pandemic, which cost R$233.61 billion. Two parliamentarians presented projects in this regard: deputy Domingos Sávio (PL-MG) and senator Alessandro Vieira (MDB-SE). The two proposals would include those affected by calamities in addition to the situation of the Gauchos, but there is no support from the government.

“In the mud of the Rio Grande do Sul tragedy, fiscal populism is wallowing, with its parliamentarians who invested nothing in containment and maintenance and are now calling for Pix amendments and emergency aid in an election year”, says Carla Beni, economist and professor at Fundação Getulio Vargas (FGV).

Furthermore, the government announced that it will advance the payment of Pix amendments for municipalities in Rio Grande do Sul, but the proposal presented to the Mixed Budget Committee (CMO) of Congress this Tuesday, 7th, went further and imposed priority for the payment of these amendments to all municipalities in calamity and in a public health emergency situation in the state of Rio Grande do Sul. Country.

The Minister of Institutional Relations, Alexandre Padilha, stated that the government will release R$1.3 billion in amendments for Rio Grande do Sul, including R$480 million in Pix amendments already approved in the Budget. Despite the broad text, he reinforced that the advance payment will be directed to the State of Rio Grande do Sul.

A change in Budget Guidelines Law (LDO) presented by the Rio Grande do Sul bench in Congress and sponsored by the government imposes priority for the execution of Pix amendments — technically called special transfers — for all municipalities that have had a calamity decree or public health emergency situation recognized by the federal government. Therefore, a greater reach than the rains in Rio Grande do Sul.

Only in Ministry of Health, there are 605 municipalities, nine States and the Federal District with emergency decrees published due to dengue and other health situations. According to experts consulted by Estadão, these locations would be included in the priority and could benefit from the Pix amendment sooner. Furthermore, other municipalities that declared a calamity or health emergency could also embark on the release and increase the volume of payments before municipal elections.

“This express corridor of emergency rescue amendments, which was built by the federal government together with the Rio Grande do Sul bench in the National Congress, is the rapid response of a government concerned with meeting the urgent demands of the Rio Grande do Sul population,” stated Padilha.

The money from the Pix amendment is already in the Budget. Release before the election period, however, would put pressure on the government to hold back on other spending so as not to create a lack of cash control. Furthermore, the special amendment falls into the funds of states and municipalities without any defined purpose, and there is no guarantee that the city hall or state government will apply the money to combat the calamity.

In the same project, there is a proposal that paves the way for the Lula government to block funds from the Growth Acceleration Program (New PAC) or even take resources from the program and place them under direct control of the Executive without links to the PAC. Behind the scenes in Congress, flexibility is seen as a way to compensate the Executive for the increase in parliamentary amendments, which could become even greater with the overturn of President Lula’s vetoes in the 2024 Budget.

According to the Ministry of Planning and Budget, the change makes clear the possibility of blockages in the Budget to comply with the spending limit of the new fiscal framework. Furthermore, it provides agility in the eventual inclusion or exclusion of investments from the New PAC portfolio.

Debt forgiveness and emergency aid

So far, all the money that the government spent to help flood victims has already been approved in the Budget, but the situation could lead to an increase in expenses, which has not yet had a calculated impact. The Minister of Planning and Budget, Simone Tebet, said on Monday, 8, that the transfer of resources outside fiscal limits will be restricted to facing the calamity in Rio Grande do Sul.

In the Senate’s Economic Affairs Committee (CAE), Senator Alan Rick (União-AC) tried to obtain the final approval (without a plenary vote) of a bill that extends the payment of rural credit and amnesties the debt of small producers who have lost their crops throughout the national territory.

The project was originally designed to remedy farmers hit by drought, but ended up being expanded. During the discussion, both Rick and the author of the proposal, Mecias de Jesus (Republicanos-RR), claimed that the project was urgent due to the crisis in Rio Grande do Sul. The project was postponed with a request for approval (more time to analysis), but remains on the agenda for the coming weeks.

“Brazil is witnessing this dramatic moment in the State of Rio Grande do Sul. Acre went through this recently”, said Rick. “We ask that the government be aware, so that we do not block a matter that needs the quickest approval, the urgency necessary to assist the people who today suffer from floods, floods and the loss of all their production.”

The leader of the government in the Senate, Jaques Wagner (PT-BA), said he recognized the seriousness of the situation, but said it was necessary to be “calm” so as not to cause a hole in the Budget. According to him, there is a profusion of projects targeting the situation in Rio Grande do Sul. “We need to be calm so as not to approve all types of projects without knowing how much they cost. Then they come and talk to me about fiscal responsibility,” he said.

O Federal Audit Court (TCU) will monitor the application of emergency resources in Rio Grande do Sul, but the Court does not monitor the use of the Pix amendment at the end, a task that falls to the local court.

“Of course, politicians always want votes, but in this case, they are responding to an outcry from public opinion. Something needs to be done quickly and to avoid misuse of these resources”, says economist Arthur Barrionuevo, also a professor at FGV.

Congress demands increase in amendments

This Tuesday, the 7th, the Senate Constitution and Justice Committee approved the DPVAT Insurance project, with a tortoise that releases an extra expense of R$ 15.7 billion in the 2024 Budget. The proposal would pass the plenary on the same day of the House, with the decree recognizing the calamity in Rio Grande do Sul.

The R$15.7 billion tortoise benefits both the government and parliamentarians, as R$3.6 billion must be invested in amendments. The vote opened the way for congressmen to demand an even greater amount of resources in an election year. The situation in Rio Grande do Sul and other states led parliamentarians to defend the importance of the amendments.

There are R$5.6 billion in committee amendments vetoed from the 2024 Budget, in addition to a calendar that imposes the payment of resources indicated by deputies and senators in the areas of health and social assistance in the first half of the year, before the elections.

The government fears losing these vetoes and is considering asking for a new postponement of the Congress session intended to analyze these proposals, scheduled for Thursday, 9th. The session was postponed two weeks ago due to the risk of overturning the vetoes and the government’s request to approval of R$15.7 billion.