Earlier this week, future economic tsar Paulo Guedes talked about “cornering” Congress into approving the unpopular pension reform. Less than 24 hours later, Mr. Guedes was cornered himself, as the Senate passed a 16-percent pay raise for the 11 Supreme Court Justices and the Attorney General – taking their monthly income to BRL 39,300, roughly 42 times the minimum wage in Brazil.
However, the decision will not only impact the 12 people who were granted the raise. It will have a ripple effect on all levels of the public administration and, according to studies carried by experts in the Senate, it will raise public spending on government payroll by BRL 4 billion to 6 billion per year. “The entire Justice system will get automatic pay hikes, as the salaries of all civil servants are proportional to those of Supreme Court Justices,” said Rafael Paschoarelli, a finance professor of the University of São Paulo, to UOL.
It means that judges get a pay hike, public defenders get a pay hike, prosecutors get a pay hike. Everyone (in the Judiciary) gets a pay hike.
Moreover, members of control institutions such as the state and federal accounts court would also recieve higher salaries. As of now, the federal government already spends BRL 322 billion on salaries. There will also be an impact on pensions, as economics professor Claudio Considera explains: “Several civil servants accumulate paychecks from the different benefits they’re entitled to. But as the salaries of Supreme Court Justices serve as the constitutional ceiling for the monthly income for servants, part of that money is cut down. Now, they will have the right to even higher benefits.”
The raise had been approved by the justices themselves back in August, in a 7 to 4 vote. It comes less than four years after their last salary bump, when the justices’ monthly income went from BRL 29,400 to the current BRL 33,700. “It’s a slap in the face to the 12 million people currently out of a job,” says Mr. Considera.
Federal spending cap
Members of Congress say the move, however, won’t impact on the federal budget, which is frozen by the federal spending cap approved in 2016. It establishes that the federal budget can only expand to match the previous year’s inflation rate. However, to fund higher salaries for a small cast of privileged servants, the government will have to slash spending elsewhere.
President-elect Jair Bolsonaro showed concern about the raise before it was approved by the Senate, saying it was “not the time” for something of the kind. Outgoing Senator Cristovam Buarque, who lost re-election in October, called the raise an example of “profound irresponsibility with public finances.” He said: “They want to put a bomb on Mr. Bolsonaro’s lap. I didn’t vote for him, but don’t expect me to act against the interests of the country.”
Quid pro quo?
The Senate President, Eunício Oliveira, said his decision to put the raise to a floor vote was to “preserve the peace between the different branches of government.” However, he could have an ulterior motive: one-third of Congress is facing criminal investigations, accusations ranging from corruption and embezzlement to attempted murder. By acting on behalf of judges and prosecutors, senators might be pulling a desperate attempt to avoid jail time any time soon.
This is especially the case for senators who lost their re-election races—such as Mr. Oliveira himself, recently accused of receiving millions in bribes from construction companies.