Lula opens the money spigot to avoid massive defeat in Congress

Time is money. But in the case of the Luiz Inácio Lula da Silva administration’s relationship with Congress, money is also time.

On Tuesday, the government released BRL 1.7 billion (USD 335,000) in congressional budgetary grants, which consists of allowing lawmakers to earmark chunks of the budget for projects of their choosing — usually in their constituencies. These grants are a way to avoid giving the Executive branch a monopoly on federal spending, but they have also become a carrot for administrations to whip up support in Congress.

By granting this huge amount of money in a single day, the government hopes to avoid the expiration of a provisional decree that establishes the structure of the cabinet.

Lula signed the decree on January 1 and it must be approved by both congressional houses by midnight on June 1, otherwise the structure of the government will revert back to how it was on December 31, the last day of the Jair Bolsonaro administration. Seventeen cabinet departments would cease to exist, including the Industry and Trade Ministry — headed by Vice President Geraldo Alckmin — and the symbolically charged Indigenous Peoples Ministry.

Last week, Lula already saw a congressional committee severely alter the structure of some of his own ministries — notably the Environment Ministry, which will lose several of its powers. While still constituting a defeat, getting the disfigured decree passed is a far less disastrous outcome than seeing it expire altogether.

This debacle is a testament to how hamstrung the government’s relationship with Congress has become. “It is a mixture of a structural reshaping of institutional relations in Brazil, with Congress being now much more powerful than it was during Lula’s first two terms, and the government’s incapacity to assess the current state of Congress,” says Beatriz Rey, a political scientist and columnist for The Brazilian Report.

“The current Congress is conservative — and the government knew that before it took office,” Ms. Rey argues. “It would have been much more productive for Lula to list a handful of priorities and negotiate the approval of grants based on those priorities, rather than essentially trying to build a new coalition with every new vote.”

Ms. Rey comments that the government has lacked focus, which makes coalition-building much more expensive — hence the need to greenlight BRL 1.7 billion in grants in one fell swoop.

A vote on the provisional decree establishing the government structure “could” begin on Wednesday evening, people privy to negotiations say. But it remains far from a guarantee.

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