The Brazilian Chamber of Deputies on Wednesday completed action approving a proposed constitutional amendment that would exempt 30% of federal revenues from so-called spending earmarks. The measure now goes to the Brazilian Senate. Passage of the amendment by the Chamber represented a victory for Acting Brazilian President Michel Temer, who has vowed to pursue a policy of fiscal austerity. The amendment creates a mechanism known as the DRU (Desvinculação das Receitas da União), effectively exempting 30% of federal revenues from automatic spending mandates in areas such as health and education. Temer has said he will use the increased flexibility represented by the mechanism to cut overall federal outlays. Previous versions of the DRU exempted only 20% of federal revenues from earmarks.
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