President Lula and Brazil’s Congress have spent the past year in open warfare, with legislators routinely overriding presidential vetoes on everything from the IOF financial transactions tax to offshore wind subsidies. So when Congress approved sweeping pay restructuring for its own staff on February 3 — including bonus mechanisms that could push top earners to R$77,000 ($13,500) per month, far above the constitutional pay ceiling of R$46,366 ($8,100) — the expectation was another bruising showdown. It did not materialize.
Lula signed the base salary increases of 8–9% for 2026 but vetoed provisions that would breach the ceiling. The key device was a “compensatory leave” scheme granting one day off for every three days of overtime, convertible to cash — creating tax-free payments beyond the constitutional limit. He also blocked escalating raises through 2029, citing the Fiscal Responsibility Law’s prohibition on mandatory expenditures in a president’s final budget periods. The vetoes were published Wednesday.
Why Congress won’t fight back
As columnist Roseann Kennedy notes in O Estado de S. Paulo, this time the math favors Lula. The original vote was symbolic — no roll call, no names attached. Overriding a presidential veto requires lawmakers to cast recorded votes. In an election year, that is a different proposition entirely. Deputy Pedro Paulo of PSD, who leads the administrative reform effort in the lower house, told the Estadão he doubts Congress would absorb the public backlash twice. Deputy Adriana Ventura of Novo agreed: lawmakers are now focused on courting voters, not defending above-ceiling pay for congressional staff.
The trap Lula can’t spring
But Lula’s victory is awkward. In mid-2025, after Congress overturned his IOF tax decree — the first such override in 33 years — the hashtag “Congress enemy of the people” dominated Brazilian social media. The Quaest polling institute found 61% of congressional mentions were negative while only 11% of executive mentions carried the same tone. Lula’s allies considered it a strategic win and kept the playbook ready for the next confrontation. This time, they cannot use it. The PT voted for the perks package, including the ceiling-busting bonuses. If Lula tries to turn the episode into another populist crusade against Congress, he exposes his own party’s complicity. As Kennedy puts it, elections override everything — including the narrative. Lula wins the veto fight but loses the weapon. This is part of The Rio Times’ daily coverage of Brazil politics and Latin American financial news.
Related coverage: Brazil’s Morning Call | Brazil’s Slowdown Opens the Door for Rate Cuts