Economy Minister Paulo Guedes has told Congress that the government will launch a new cash-transfer program to replace the world-renowned Bolsa Família. Mr. Guedes promises that his initiative, called Renda Brasil (Income Brazil), will be broader and “more inclusive” than Bolsa Família.Bolsa Família gives money to families with children of up to 17 years old attending school. For each kid, the household receives BRL 41 (USD 8.50) — to a cap of BRL 205 per family.Mr. Guedes’ idea would be to include informal workers, too. They would get the money through a “negative income tax.” That is, they would have to declare their income in the informal economy — getting rebates for each Brazilian Real declared.Bolsa Família has lifted millions of families out of extreme poverty. Extending the benefit to informal workers — who were the hardest-hit by the pandemic — could be a game-changer.The new program would be much cheaper than the BRL 600 emergency salary created during the pandemic. The three-month benefit will be extended for an extra two months — but installments will be halved to just BRL 300. The continuation of some sort of stipend for vulnerable populations is seen as vital by many economists — including many in Brazil’s mainstream libertarian camp.Political gain. The emergency salary increased President Jair Bolsonaro’s popularity among lower-income voters, compensating for his loss of support among better-educated ones. If successful — and that is a big if, considering the economic depression Brazil is set to face — it could help Mr. Bolsonaro crack the Workers’ Party’s electoral strongholds.________________________The Brazilian Report is an independent media outlet uniquely positioned to offer an insider’s view on current affairs in Brazil.
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