The Ministries of Defense and Cities were the departments most affected by the additional blockade of R$22.1 billion in the 2026 Budget. The federal government published, this Friday (29) evening, the decree with details of the cuts by ministries and federal bodies.
Last week, the Bimonthly Revenue and Expense Assessment Report, a document that guides the execution of the Budget, increased the blockade of federal expenses from R$1.595 billion to R$23.679 billion in 2026. The measure, announced by the Ministries of Finance and Planning and Budget, seeks to ensure compliance with fiscal targets and prevent public spending from exceeding the limits established by fiscal responsibility rules.
In addition to the blockade, the Executive maintains temporary restrictions on the release of resources, a mechanism known as “commitment phasing”, which restricts the contracting of expenses and reaches R$27.1 billion by November. Together, the measures restrict more than R$83 billion in resources until the end of July.
Where are the cuts
Most of the blockage falls on so-called discretionary (non-mandatory) expenses and the Growth Acceleration Program (PAC), which are the expenses that the government can manage throughout the year, such as investments, works, purchases of equipment and funding of the public sector.
Of the R$23.679 billion blocked, R$18.709 billion affects Executive Branch expenses, of which R$9.963 billion is discretionary spending and R$8.746 billion is PAC. Another R$4.97 billion falls on parliamentary amendments.
Among ministries, the biggest cuts were concentrated in the following portfolios:
• Ministry of Defense: R$4.363 billion;
• Ministry of Cities: R$3.32 billion;
• Ministry of Education: R$1.605 billion;
• Ministry of Transport: R$ 1.5 billion;
• Ministry of Finance: R$ 1.396 billion;
• Ministry of Health: R$1.002 billion.
In practice, this means less budgetary space for the execution of projects, contracts and investments in these departments until further reevaluation of public accounts.
Preserved areas
Three ministries remained outside the blockade in this second two months: Justice and Public Security, Social Security and Labor and Employment.
The preservation of these areas indicates the government’s priority in maintaining expenses linked to public security, social security benefits and employment policies. In the case of Social Security, the main objective of the blockade was to guarantee the reduction of the queue at the National Social Security Institute (INSS).
What is phasing
In addition to lockdowns, the government is using so-called commitment phasing. The mechanism does not cut resources, but temporarily limits the speed with which agencies can make new financial commitments.
The measure works as a cash flow control. If revenue is below expectations, the government avoids committing (authorizing the expenditure of) resources before confirming the inflow of revenue.
The commitment restriction is expected to amount to R$59.866 billion until July. The value subject to this control drops to R$27.148 billion by November and to zero in December.
When adding the blockade of R$23.679 billion, the restriction reaches R$83.545 billion until July and R$50.827 billion until November.
Amendments reached
The blockade also reaches R$4.97 billion in parliamentary bench amendmentsresources indicated by deputies and senators for works and projects in the states.
In this case, Complementary Law 210/2024, approved to regulate the execution of parliamentary amendments and increase the transparency of these resources, will be applied.
According to the complementary law, the amendments are blocked up to the same proportion applied to other discretionary expenses, to meet fiscal targets. However, Congress will be able to define priorities when there is a need for blocking or contingency, indicating which programs will have resources preserved and which will be affected by cuts, within the limits defined by the government.
Next steps
Federal ministries and agencies will have until June 8 to inform which programs and actions will be blocked within the established limits.
The Ministry of Planning and Budget also informed that it will continue to monitor revenues and expenses throughout the year and may adopt new measures if necessary to ensure the balance of public accounts and compliance with the 2026 fiscal target.
