Lula da Silva’s proposal is to remove Brazil Aid from the spending cap indefinitely

The draft PEC, called ‘fura-teto’, sent by the transitional government team of President-elect Luiz Inácio Lula da Silva (PT, left) to Congressional leaders on Wednesday (Nov. 16) permanently removes Auxílio Brasil from the spending cap and makes room for an increase in funds for investment.

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Off-limit spending could reach R$198 (US$37) billion.

The calculation assumes a total cost of R$175 billion to pay the R$600 subsidy and an additional R$150 for beneficiaries with children up to age 6, in addition to an authorization to use up to R$23 billion in additional revenues for investments.

Lula da Silva’s team sees the “perpetuity” of the hole in the ceiling as an issue that will enter into negotiations with congressional leaders.

Ultimately, they will accept a 4-year term, as discussed by the president-elect and Rodrigo Pacheco (PSD-MG).

DELIVERY OF PEC ‘FURA TETO’

Vice President-elect and Coordinator of the Transitional Government, Geraldo Alckmin (PSB), personally went to Congress to deliver the draft PEC (proposed constitutional amendment) to the Chairman of the Constitutional and Judicial Commission of the Senate, Davi Alcolumbre, the General Rapporteur for the Budget, Marcelo Castro and the President of the Chamber of Deputies, Arthur Lira.

“It [the draft] takes the Bolsa Familia out of the ceiling. The R$600 and R$150 per child under six will work. It’s about social welfare, fighting hunger and poverty, and helping children.”

“The second theme is investment, the environment, and education,” Alckmin told reporters.

Another issue addressed in the bill is the removal of environmental spending from the spending cap that would be funded by outside donations, such as fundraising and Amazon conservation.

For example, investments in education paid for with funds obtained through agreements between private institutions and public universities would also be excluded from the cap.

These items do not directly affect the 2023 budget because there are no expenditures associated with these donations, so the measure would have no effect on the unoccupied space in the cap.

Although the proposal does not include a time limit for rescinding Brazil aid or any other program that follows the spending cap, Alckmin said it is not a blank check.

He mentioned the locks that would limit spending, but the draft presented does not explicitly include those locks.

Neither the R$175 billion nor the R$23 billion.

The Vice President-elect said that the values’ specifications should not be included in the Constitution.

According to him, the deputies will decide these details when they vote on the 2023 budget.