President Luiz Inácio Lula da Silva (PT) began an operation this week to try to contain the split within the government amid discussions about the spending cut package. The readjustment measures are being designed by the Minister of Finance, Fernando Haddad, but are the target of criticism and protests by several members of the government and parties within the governing base.
The package should have been announced by Palácio do Planalto at least two weeks ago and was repeatedly postponed in the face of these clashes. According to Haddad, this deadline is now until Thursday (14), the day Lula leaves for Rio de Janeiro, where he will participate in the G20 summit.
“We are living in a democracy, fortunately; it is natural for there to be a debate. We are very sure of what we are doing. It is for the good of the workers,” said Haddad.
According to allies of the Minister of Finance, the main operation at this time within the Planalto aims to prevent the package from being dehydrated due to pressure from the other ministers. There is an expectation that the cuts will affect social programs, such as the Continuous Payment Benefit (BPC) and unemployment insurance, and that they will affect ministries, such as Health and Education.
Minister Wellington Dias (Social Development) resists giving up resources to the BPC. Luiz Marinho (Work and Employment) criticized the possible reduction in unemployment insurance. Both are ministers who are members of the PT itself. Carlos Lupi (Social Security) threatened to resign if the department has cuts.
To try to contain the implosion within the government itself, Lula met again with these social ministers this Tuesday (12) in the morning. The meeting was attended by Haddad and, according to interlocutors, was marked by direct clashes between the ministers and the head of the economic department.
Despite internal discussions, it is Lula who will define which folders will be affected. Haddad denied that the clashes with the other ministers resulted in dehydration of the package designed by the Treasury.
“There were adjustments. There were improvements incorporated, yes, but I wouldn’t call it dehydration. On the contrary, I think they make the measures more understandable, more palatable. We understand that the process was very beneficial”, minimized Haddad after the meeting with Lula.
Spending cuts could affect Defense and generate wear and tear on the military
Furthermore, the government is considering including resources from the Ministry of Defense in the list of spending cuts. The measure could generate clashes with Minister José Múcio Monteiro and the military, who had already been complaining about the lack of resources for the department.
Defense has the fifth largest share of the Esplanada’s budget and the government indicated, in the budget proposal, R$133.6 billion for next year. The text, sent to the National Congress at the end of August, still has to be approved by the Legislature.
Only with the Brazilian nuclear submarine project (along with its reactor) and the purchase of Gripen fighters from Sweden, around R$ 2.5 billion are expected next year. Despite this, Múcio had already been asking for more resources for the ministry.
Still in July, when the package began to be discussed by the economic team, the Minister of Defense had already spoken out against reducing the budget for his portfolio. “I didn’t ask Haddad if we are going to be cut or not [neste ano]but I made a point of showing him our reality to be worthy of a fair trial. I’m optimistic. Here we can’t take any more cuts”, said Múcio at the time.
However, the inclusion of the budget allocated to the Ministry of Defense in the list of spending cuts was requested by President Lula. “The president asked to include a ministry in this effort, a negotiation that should be completed by Wednesday. I’m not going to say anything further, because I don’t know if there will be enough time to incorporate the request. But I believe there will be good will,” he said Haddad.
The Executive is discussing, for example, ending the so-called fictitious death pension, granted to the wife of a soldier when he is expelled from the Armed Forces for irregularities committed during his period of active duty. This and other points should be negotiated at a meeting between Múcio, Haddad and Lula at Palácio do Planalto this Wednesday (13).
Reserve general, senator and former vice-president Hamilton Mourão (Republicanos-RS), criticized the possible reduction of resources for the military.
“The Lula government is further blowing up the Social Security accounts by granting a real increase in the minimum wage, which is not minimum. Now it decides to attack the military’s Social Protection System, wanting to present it as the villain of this story”, wrote Mourão in X.
PT and base parties are on a collision course with Haddad
In addition to the clashes within the government itself, parties from the government base began to pressure the Palácio do Planalto against the spending cut package. The crisis became more acute in recent days after the PT, led by deputy Gleisi Hoffmann (PR), one of Haddad’s main enemies, endorsed the manifesto of the government parties.
“Now they want to cut the flesh of the majority of the people, advancing their machete over historic achievements such as the real readjustment of the minimum wage and its link to pensions and the BPC, unemployment insurance, worker rights over the FGTS [Fundo de Garantia por Tempo de Serviço]the constitutional floors of health and education”, says an excerpt from the manifesto.
In addition to PT, parties such as PDT, PSOL, PCdoB also sign the document. Among Haddad’s allies, the endorsement by the PT was yet another of Gleisi Hoffmann’s attacks against the agenda defended by the Minister of Finance.
Member of Lula’s party, deputy Emídio de Souza (SP) criticized the acronym, stating that “PT cannot be in opposition to the administration itself and pretend that it is not a government”.
“It is not reasonable for our leaders to propagate that the measures currently being debated in the government are unnecessary or that they would just be market whims. A different stance was expected from the PT. We are not in the government, we are the government itself. We are not a social movement, we are the political party that runs the country”, declared the deputy.
Publicly, Haddad minimized the criticism and stated that debate is natural in a democracy. “We are very sure of what we are doing. It is for the good of workers. Controlling inflation is part of our job. Maintaining economic activity is part of our job. It is a balance. It is a balance between important variables for all Brazilians”, said the minister.
The clash over spending cuts deepens a split in the PT that has been deepening after a lower-than-expected result for the party in October’s municipal elections. Among the points of friction is Gleisi’s succession as president of the party, as his term ends in 2025.
