In an important victory for Acting President Michel Temer, Brazil’s Congress early Wednesday raised the ceiling for the government’s 2016 primary budget deficit. The new ceiling will be R$170.5 billion, up from the previous limit of just R$24 billion. Temer told congressional leaders Monday the government needed to base its 2016 fiscal policies “on realistic numbers,” including a much higher deficit. Approval came in the early hours of Wednesday following 16 hours of debate and delaying tactics by opposition parties. Approval came through a voice vote by a joint session of the two houses of Congress. Failure to approve a new deficit ceiling could have led to a partial government shutdown on May 31. Temer must still face other, perhaps more difficult, congressional tests in the coming months. These include a constitutional limit on growth in federal spending and a sweeping reform of the nation’s bankrupt pension system.
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