Current Congress Sets Budgetary Traps for Bolsonaro
Realpolitik is already challenging President-elect Jair Bolsonaro even before he takes charge. In a blitzkrieg, Congress passed several bills that have added an estimated R$ 259 billion to his government expenditures in 2019.
Among them, a 16% raise for Supreme Court judges, which will have a ripple effect on all levels of the judicial branch and inflate wage increase expectations from public servants in the executive and legislative branches.
Another is a package of tax incentives for the auto industry, which after having been stalled for months in Congress was voted on by the Senate in a record 22 minutes.
A majority of current lawmakers will not be in Congress next year because they were not reelected. But their decisions stand and could be a harbinger of problems between Bolsonaro and the legislative branch.
As promised in the campaign, Bolsonaro is choosing his ministers without formal consultation with political parties and without making agreements with them in exchange for future support in the House and Senate.
As long as he maintains his high popularity ratings, he may have political capital to deal with the dissatisfaction this way of managing government will likely cause among lawmakers.
Last week’s decision came after incoming Economy Tsar Paulo Guedes suggested bluntly that Congress should be pushed to pass at least some items of a pension overhaul this year.
Although both Bolsonaro and President Temer say they are committed to do it, most analysts believe the chances of it happening are almost nil.
The president-elect should meet all 27 governors-elect this week, but he cancelled appointments he had scheduled with the heads of the House and the Senate, most likely in retaliation for the budgetary trap they set for him.
He will need as much support as possible from the incoming Congress, and the new governors may be instrumental in his obtaining it. At least 16 of them supported Bolsonaro in the runoff and this suggests he may have a head start. But most states are in a very dire fiscal situation that is threatening payment of the 13th salary to their public servants and even the provision of essential services to their citizens.
Finding a solution to the states’ crisis will be one more pressing challenge for Bolsonaro and his team, which is almost entirely inexperienced in public management. Some of the new governors are also untrained in government, which will pose additional problems for them.
The views and opinions expressed in The Pulse are PATRI’s own and do not necessarily reflect the views and opinions of the Brazil-U.S. Business Council. For additional information please email Carlos Eduardo Lins da Silva, at linsdasilva@patri.com.br.
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