The Brazilian Chamber of Deputies early Wednesday approved an administration-sponsored bill allowing states to renegotiate debts owed to the federal government. The bill must still be passed by the Senate. It is part of a fiscal reorganization drive by the administration of Acting President Michel Temer. The bill allows state governments to stretch out debt payments for up to 20 years. It also limits state government spending increases to no more than previous-year inflation during the first two years of the stretch-out period. As part of a compromise, the administration dropped a clause prohibiting salary increases for state government employees over a two year period.
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