Financial aid bill a key vote next week

financial aid Covid-19 forces Brazil's Congress into de facto recess
The House’s “Green Room,” almost empty. Photo: Lula Marques/APT

Amid disagreements between the federal government and the lower house of Congress, lawmakers pushed the voting of a financial aid bill to Monday, April 13. Presented by right-wing Congressman Pedro Paulo, the bill proposes the short-term suspension of the so-called “Mansueto Plan,” which conditioned aid packages to the implementation of austerity policies by state governors. Instead, it would allow local governments to receive aid without any strings.

The Economy Ministry predicts the proposal could have a BRL 180-billion (USD 35.2 billion) impact on the federal budget. House Speaker Rodrigo Maia, however, claims the real amount would be nearly half that presented by the ministry.

Named after Treasury Secretary Mansueto Almeida, the plan provided for privatizations and the reduction of tax benefits and incentives. For Mr. Maia, the crisis jeopardized the effectiveness of the project, which was envisioned for the long-term, and now members of Congress are favoring emergency measures.

Brazilian states’ finances are nearing collapse. A 2019 report from the Treasury Department carries a grim diagnosis of Brazilian state accounts. Despite a slight improvement in 2018 — when states combined for a BRL 5.6-billion primary surplus after three years of deficits — administrations have much less money than they need, with an overall deficit of BRL 14.8 billion.