At least five ministers from the government of President Luiz Inácio Lula da Silva (PT) have already taken a stand against the spending cuts that the economic team is proposing, which could reach R$50 billion according to market estimates. The criticism comes mainly from the social area, but also involves health and education.
In the social area, Wellington Dias (Social Development) has already said that he will not change Bolsa Família and the Continuous Payment Benefit (BPC), Luiz Marinho (Work and Employment) criticized the possible reduction in unemployment insurance, and Carlos Lupi (Social Security) ) threatened to resign if the department has cuts.
Privately, Nísia Trindade (Health) and Camilo Santana (Education) also resist possible changes to the constitutional floors of their areas, including linking the Basic Education Fund (Fundeb) to the fiscal framework.
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They will participate in the – in principle – last ministerial meeting called by Lula for this Friday afternoon (8) to conclude the negotiation of the spending cut, which was supposed to take place on Thursday (7), but which ended without an agreement. The president is trying to arbitrate the discussion between them and ministers Fernando Haddad (Finance) and Simone Tebet (Planning).
Haddad has used the argument that the cuts are necessary to make expenses comply with the rules of the fiscal framework and prevent them from growing without limit, which could become unfeasible from next year onwards – paralyzing the government due to lack of budgetary margin.
In general terms, the package proposes the inclusion of mandatory government expenses in the rule that limits the expansion of spending to 2.5% above inflation. If there is an increase above this level, an alternative would be to activate triggers to lock these accounts.
“What we are taking to the president is consistent with the thesis we are defending, of strengthening the fiscal framework,” declared Haddad.
There is also the expectation that the fine-tooth comb on social benefits — such as the BPC — will be intensified and with stricter rules, such as the prohibition of accumulation and the need to provide proof of life annually. “We are not going to cut benefits for those who are entitled to Bolsa Família and BPC”, said Dias.
The position is shared by Lula and the government leader in Congress, senator Randolfe Rodrigues (PT-AP). He stated that no “acquired rights” will be cut – like these benefits – but that they will be adjusted in search of irregularities.
Only the BPC and unemployment insurance, which directly affects Luiz Marinho’s portfolio, have seen a surge in concessions since last year. This raised the government’s warning signal about the possibility of irregularities.
So much so that payments to the elderly and disabled are undergoing a review that could be even tighter from 2025, with the need to provide proof of life annually.
“The average salary for people is R$1,860. What am I going to do with this? Take away acquired rights? Don’t count on me. Will I lower my salary? Don’t count on me. I will no longer have any real gains [no salário mínimo]? Don’t count on me. If that happens, I can’t stay in government. I don’t think the government will do that. We have to charge big debtors, tax evasion and undue exemptions”, threatened Lupi in an interview with the newspaper The Globe and fifth (7).
