State Governors Call for Enforcement of 2005 Law Providing Basic Income to All Brazilians

RIO DE JANEIRO, BRAZIL – Brazilian Governors meeting on Wednesday afternoon, March 25th, in a videoconference, approved a letter with a number of demands to the federal government  to address the coronavirus crisis. Among these demands is the enforcement of the law that establishes “basic citizenship income” payments to all Brazilians and long-term foreigners resident in Brazil.

Passed in 2005 by Congress and signed by President Luiz Inácio Lula da Silva, Law 10,835/2004 provides for “the right of all Brazilians resident in the country and foreigners residing for at least five (5) years in Brazil, regardless of their socioeconomic status, to receive an annual cash benefit”.

The law provides that it will be up to the Executive Branch to determine the amount of the benefit and provides for the payment of monthly installments to all citizens, in order to cover “the minimum expenses of each person related to food, education and health, considering the country’s degree of development and budgetary feasibility”.

The governors also demand the 12-month suspension of the payment of state debts to the federal government and public banks, in addition to “allowing the payment of instalments only upon termination of the contract” and “the provision of credit lines by BNDES for investment in health services and construction work”.

Once the meeting was over, the governors had time to assess and pass the proposals, which happened early in the evening, according to the representatives of the state government of São Paulo. The meeting was attended by 26 of the 27 governors – the only absentee was Ibaneis Rocha from the Federal District – and the Chamber president, Deputy Rodrigo Maia.

The proposals to be submitted to the federal government are as follows:

A 12-month suspension of the payment of state debts to the federal government, Caixa Econômica Federal (Federal Savings Bank), Banco do Brasil (Bank of Brazil) and BNDES (National Bank for Economic and Social Development), and the availability of credit lines from BNDES for investment in health services and construction work;

Emergency and substantial feasibility of “free” federal government funds;

Changes in the tax recovery system and approval of the so-called Mansueto Plan. The plan, submitted to Congress in June last year, proposes to guarantee states with low levels of indebtedness to contract loans from the financial sector and grants a period of up to five years to states failing to comply with the limits of the Fiscal Responsibility Law (LRF) so that they may fall within the established limits;

Reduction of the primary surplus target to avoid the threat of budget contingency (blockage);

Enforcement of Law 10,835/2004 establishing the basic citizenship income.

In the letter, governors say they hope that President Jair Bolsonaro “will have serenity and join forces” with them to tackle the effects of the coronavirus crisis.

In the letter, the governors say they will continue to take measures in accordance with the guidelines of health professionals and the World Health Organization (WHO).

These guidelines provide for social isolation as a means to prevent the spread of the virus and contain the spread of the Covid-19 disease. President Jair Bolsonaro challenges these guidelines and, instead of “mass confinement,” advocates only “vertical isolation” of high-risk groups such as the elderly; he calls for the reopening of schools and businesses, and the reestablishment of the economy.

In a videoconference with southeastern region governors on Wednesday, Bolsonaro attacked the governor of São Paulo, João Doria, whom he called “dogmatic”.

“Regarding the fight against the global pandemic, we will continue to adopt measures based on what science states, following the guidance of health professionals and, above all, the protocols directed by the World Health Organization (WHO),” reads the governors’ letter.

During the governors’ meeting, Rodrigo Maia said it is necessary to distinguish the measures that should be adopted in the short, medium and long term.

According to Maia, the “mood” between the federal government and Congress “is not the best” and, therefore, Congress and governors must define short-term measures.

“We need to settle this in the short term, ensuring employment, the income of municipalities and states so that they may continue to operate. Employment and income for the poorest and conditions for the municipalities to continue operating,” he said.

Federal government measures

Last Monday, the federal government announced an aid package to the states with a total amount of R$88.2 billion, distributed as follows:

Transfer of R$8 billion for health care spending;
Reorganization of state and municipal funds, in the amount of R$16 billion (insurance for drop in revenue);
Transfer of R$2 billion for social welfare spending;
Suspension of state debts to the federal government (R$12.6 billion);
Renegotiation of state and municipal debts with banks (R$ 9.6 billion);
Borrowings with eased credit  terms, in the amount of R$ 40 billion.