BRASILIA (Reuters) -Brazil’s lower house on Wednesday approved a constitutional amendment to increase the government spending cap to maintain welfare payouts to poor families next year, a centerpiece campaign pledge by the country’s next president.
In a major victory for incoming leftist President-elect Luiz Inacio Lula da Silva, the chamber voted 331 against 163 to pass the bill that would raise the spending cap by 145 billion reais ($28 billion) for one year to fund payments of 600 reais a month under the Bolsa Familia welfare program.
The amendment would also allow an additional payment for families with children up to six years old, as well as other social programs.
The bill, which now passes to the Senate for a second vote, would also exclude 23 billion reais of windfall revenue on public investment from the spending cap, among other measures to secure social spending.
Incoming finance minister Fernando Haddad told reporters the comfortable victory in the lower house served as a good test of the future government’s political support in Congress.
Haddad also intends to send to Congress a new fiscal framework to replace the spending cap in the first half of 2023. According to the future minister, once approved, the new set of rules would help organize public finances.
On Tuesday, lawmakers trimmed back the proposal’s lifespan to one year, from a previously planned two-year period. Senators will now vote on the bill again to approve the changes.
Lula’s transition team initially proposed an amendment that waived 175 billion reais in welfare funding from the spending cap for each of the four years of his presidential term. But the Senate scaled this back earlier this month.
A Supreme Court Justice on Sunday granted an injunction excluding the Bolsa Familia program from the spending cap, giving a temporary green light for the payment to be extended into next year, even if lawmakers reject the bill.
(Reporting by Maria Carolina Marcello; Writing by Peter Frontini and Alistair Bell; Editing by Stephen Coates)
