President Jair Bolsonaro signed a decree decentralizing control over the federal budget. While this is a customary move to facilitate government functioning, the president added a provision which strips Economy Minister Paulo Guedes’s power to have the final say on budgetary decisions.
Instead, that control is passed on to Chief of Staff Ciro Nogueira, a prominent leader within the “Big Center,” a federation of conservative rentier parties which have been the bedrock of Mr. Bolsonaro’s loose congressional coalition.
With his increased powers, Mr. Nogueira will now be able to use federal funds as a bargaining chip in negotiations with political parties. His Progressives (PP) party — to which the House Speaker also belongs — has jacked up spending on congressional budgetary grants, tools used by lawmakers to finance projects within their constituencies for political gain.
With the elections just nine months away, giving the PP party the keys to the budget could mean opening up the spending floodgates. “This is a bad idea that leaves the budgetary execution board subject to political interests,” one seasoned Congress budget analyst told The Brazilian Report.
Since taking office, Economy Minister Paulo Guedes has tussled with congressional leaders over the power to dictate economic policy. And the politicians have beaten the ultra-liberal economist at almost every step of the way.