Senate approves text of new fiscal framework with changes

With 57 votes in favor and 17 against, the plenary of the Federal Senate approved, on the night of this Wednesday (21), the report by Senator Omar Aziz (PSD-AM) on the new fiscal framework. The text replaces the current spending ceiling and creates new rules with limits on Union expenses. Senators still vote on highlights of the project, which can modify the base text approved. The approved report underwent changes in relation to what came from the Chamber of Deputies and, therefore, will return to the deputies for consideration, for a decisive vote. The main changes brought by Aziz were the withdrawal of the Constitutional Fund of the Federal District (FCDF), the Basic Education Maintenance and Development Fund (Fundeb) and spending on science, technology and innovation from the spending limits imposed by the framework. Now, the House will evaluate whether or not to maintain the changes approved by the senators. The prediction of the mayor, Arthur Lira, is that the House will vote on the text by the beginning of July. Earlier, during approval of the matter in the Economic Affairs Committee (CAE) of the Senate, opposition parliamentarians criticized the project. “We can’t put our fingerprint on a project that won’t survive the first year. The government will not meet the fiscal target. It will be difficult for him to reset the deficit”, said the leader of the opposition in the Senate, Rogério Marinho (PL-RN). In response, rapporteur Omar Aziz argued that the rules will allow for debt stability. “You have a spending limit of 70% and with the other 30%, which will possibly have excess revenue, you are already committing to reduce the public debt, which is a debt in real, we do not have a debt in dollars” , he pondered. New rules The spending ceiling approved during Michel Temer’s government limited the Union’s expenses to the inflation variation of the previous year, without taking into account the increase, or not, of the State’s revenue. That is, even with the increase in tax collection, spending was limited to the variation in the Extended Consumer Price Index (IPCA). Now, the new rule approved by the Senate allows for the increase in expenses, also taking into account the variation in revenue. The Union will be authorized to increase expenses by up to 70% of the increase in revenue. The project also establishes fiscal targets for primary expenditures, with a forecast of reaching a zero fiscal deficit as early as 2024. Primary expenditures are all government expenditures excluding debt expenditures. The Chamber of Deputies, in the first vote, included in the project the forecast of blocking expenses in case of non-compliance with the proposed fiscal target.

Agência Brasil