“May the example given by the federal government be the last among those in which the executive tries to usurp attributions of the legislature,” said the president of,. The mayor, on the other hand, threatened to approve a legislative decree to suspend the tax increase proposed by the executive. It is another chapter of the during the third term of.
The episode refers to the defeat of PEC da in 2007, at the height of the executive’s hegemony standard, in Lula 2. The proposal to extend to another four years after two decades of validity was rejected in the Senate, resulting in an estimated loss of collection of $ 70 billion.
Two central questions emerge from this historical parallel: the transformations in executive-legislative relations in the last decade and the exhaustion of the most common response to fiscal imbalance-the increase in taxes. Since the defeat of, in 2007, the political costs of lifting the tax burden have become significantly higher. The difficult negotiation around the tax reform approved in 2023 (EC 132/23) – and the strong restriction on non -expansion of load – is the last relevant example.
The defeat occurred when the executive had instruments to enforce his schedule – for example majority congressional robust, high popularity and wide discretion in budget execution. What’s more, in the first year of Lula 2 when the government still surfed in the benefits of the presidential honeymoon, which clearly contrasts with the situation of virtual lameness in which it is at the moment. At that conjuncture the amendments of the imposing budget (EC 86/15 and EC 100/19) had not been approved or the Electoral Fund (2017) had been raised from the campaign.
The creation of individual and bench mandatory amendments reduced the legislature’s dependence on the Executive. Already the billionaire guaranteed AE imposed barriers to the entry of new actors in the electoral system. There is, in this process, deep endogeneity: institutions shape the behavior of the actors, but are also modified by them. Institutional changes impose rigidity, but are also response to the loss of power of the executive in the face of other powers.
The influence of the legislature on the budget increased significantly, going beyond the simple imposition of amendments. A recent dissertation by Alexsandra Cavalcanti (UFPE) estimates, based on international comparative metrics, an increase of 17.4 points in the legislature’s budget score between 2007 and 2023 – which captures a significant set of organizational changes in the relationship between powers.
The institutional framework – multiparty presidentialism, fiscal rules, etc. – creates embarrassment, but does not unilaterally determine the results of politics. It is the structure. And coalition management constitutes the agency. Between structure and agency there is room for contingent choices. The choices and tax and budget decisions in Lula 3 are their products. The change in the country’s risk assessment is the consequence.
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