By Richard Mann, Contributing Reporter

RIO DE JANEIRO, BRAZIL – The session of the Joint Budget Committee (CMO) discussing the release of an extra credit of R$248 (US$63) billion to the government was adjourned until June 11th, amid a stalemate between government and opposition legislators over the approval of the additional resources.

The so-called "golden rule" impedes the federal government from borrowing in order to pay current expenses, such as Social Security and welfare benefits, without the approval of legislators.
The so-called “golden rule” impedes the federal government from borrowing in order to pay current expenses, such as social security and welfare benefits, without the approval of legislators. (Photo by Jose Cruz/Agencia Brasil)

Allies attempted to vote on the text prior to the session’s adjournment, but the opposition continued its obstruction of voting.

As a result of the crisis in public accounts, the government urged Congress at the beginning of the year to provide an extraordinary credit of R$248 billion.

These funds will be obtained by issuing treasury bonds. The so-called “golden rule” impedes the federal government from borrowing in order to pay current expenses, such as social security and welfare benefits, without the approval of legislators.

President Jair Bolsonaro will need to approve this project by no later than June 15th, to ensure that he does not run out of money to pay the Continuing Benefit Conveyance (BPC) to low-income seniors.

Without the supplementary credit, the government will run out of money as early as June to pay for projects that rely on this additional amount, such as the Safra (“harvest”) Plan.

As of June 20th, funds will be lacking to pay the BPC to two million low-income seniors, according to the Ministry of Citizenship. The impoverished disabled, totaling another 2.5 million program beneficiaries, would be affected as of July.

The bill calling for the additional money was submitted to Congress in March. The government’s political disarray, however, hinders the solution to the problem.

Of the total amount requested for 2019, R$201.7 billion is earmarked for retirement and pensions, in addition to R$30 billion for the BPC. There is also funding for the Bolsa Família (“family fund”) and other benefits.

After voting in the CMO, the government must secure 257 votes in the Chamber and 41 in the Senate to be eligible to make payments with government bonds.

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