Government Wants to Include Guaranteed Basic Income Program in Constitution

RIO DE JANEIRO, BRAZIL – The government is negotiating the inclusion in the Constitution of the main concepts of Renda Brasil (Guaranteed basic income program), a social program to replace the Bolsa Família (Family Grant). In an interview with the newspaper O Estado de S. Paulo, the government leader in the Senate, Fernando Bezerra, stated that the goal is to guarantee every Brazilian citizen the right to a minimum income.

Bezerra said the plan is to include the concepts of Renda Brasil in Senator Marcio Bittar’s proposed Constitutional Amendment (PEC), which includes measures to cut spending and make room in the spending ceiling, the device that links increased spending to inflation.

According to Bezerra, the deindexation measures (removal of automatic spending corrections), decoupling (removal of the spending “stamps”) and exoneration, should open a fiscal space of R$20 billion in 2021, an amount that could exceed R$40 billion in the second year of implementation.

According to him, the low inflation scenario allows a chance for the approval of a minimum wage decoupling, which would no longer be automatically corrected by the INPC (National System of Consumer Price Index) to enable the Renda Brasil. “Just as we included in the Constituent Assembly of 1988 the SUS (Nsyionsl Health System), we will ensure the minimum income,” he said.

Among the concepts that will be included, it will be defined that Renda Brasil will attend to Brazilians from early childhood until their first job.

The government leader spent the last few days in negotiations to define the voting schedule for the main items on the economic agenda. According to him, the plan is that on November 16th the fiscal space for financing Renda Brasil in 2021 will be defined, with the amount of resources available and the size of the public benefited.

Until then, the strategy is to pass the measures that will open space to finance the program through the federal pact PEC. “It is a very innovative program, which fosters the formalization of employment, but with a commitment to social solidarity,” he said, pointing out that the Covid-19 pandemic has exacerbated inequality worldwide.

According to the deputy, the program will ensure the right to a minimum income so that a substantial contingent of Brazilians will not fall below the poverty line.

Financing sources

The fiscal space is one of the great uncertainties of Renda Brasil. President Jair Bolsonaro had been expressing his wish for a benefit close to R$300 per month, but to do so the economic team suggested ending benefits such as salary bonuses (14th salary paid to formal workers who earn up to two minimum wages) and closed season insurance (paid to fishermen during the activity ban period). The suggestion was rejected by the President.

Since then, the economic area has focused its strategy on the development of the program itself, although more timidly at first.

According to a source, the plan is to create the “little box” for Renda Brasil and gradually direct resources there. The assessment is that, with the results, Congress itself will want to boost the program and endorse the revisions of existing benefits suggested by the Ministry of Economy.

Source: O Estado de S. Paulo