“Ask Paulo Guedes,” says Brazil’s VP Mourão on pay raise for government employees

RIO DE JANEIRO, BRAZIL – Brazil’s vice president General Hamilton Mourão, when asked about the feasibility of raising government employees’ salaries, said that the responsibility would fall to Economy Minister Paulo Guedes.

“Ask Paulo Guedes, only he knows,” Mourão said on Friday, November 19.

President Jair Bolsonaro on Tuesday, November 16, confirmed that he intends to use part of the fiscal room created by the potential approval of the court-ordered federal debt proposed constitutional amendment (PEC) to grant salary raises to federal civil servants.

He made the statements after attending a business event in Manama, capital of Bahrain, after a three-day visit to Dubai.

Chamber of Deputies president Arthur Lira said on Thursday, November 18, that he sees no room, in the court-ordered PEC text passed by the lower house of Congress, to grant pay raises to civil servants. “I have not seen this room, I don’t know this room, the figures presented by Economy [Ministry] to the Chamber of Deputies did not foresee this increase,” he said.

The PEC is the main congressional measure currently of interest to the Planalto Palace. Through the bill, it will be possible to increase the government’s spending margin by almost R$100 (US$17.8) billion in 2022, the year in which Bolsonaro will seek reelection.

The assessment of allied leaders of the President is that Congress would oppose a broad salary adjustment to federal employees, particularly if the measure will require an even greater reduction in the amount to be allocated to parliamentary riders and social spending in 2022.

However, negotiations in the Senate show that, in order to pass the PEC, the government will have to change the text and prevent the increase in spending provided for in the bill from being used to finance the increased spending.

In an attempt to guarantee the payment of R$400 of the “Auxílio Brasil” (Brazil Aid) as early as December (which depends on the PEC), the government is considering proposing that the changes under discussion in the Senate be included in another text – a parallel PEC. Only this second text would go to a vote in the Chamber, while the original pillars of the PEC would be enacted in early December.