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BRASILIA – Neither renewal of emergency aid nor creation of the Citizen Income program. According to senior government officials, the idea now is to maintain Bolsa Família, which currently benefits 14.2 million families, and include more people in the rules.
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Sources close to President Jair Bolsonaro say that he is not working with the possibility of renewing emergency aid, now at R $ 300 and ending in December, and would also have given up generating Citizen Income this year.
However, the government’s estimate is that at least three million families should continue to receive assistance as of January, with the end of emergency aid. The benefit granted during the pandemic serves more than 67 million people at a cost of R $ 590 billion at the end of the year.
Before the aid, 1.6 million families were lined up at the Ministry of Citizenship. Of this total, 1.2 million entered Bolsa Família and 400 thousand began to receive emergency aid.
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The economic team planned to create a new social program that would include more beneficiaries and pay more than the current Bolsa Família.
For the proposal to fit into the Budget, the intention of the Minister of Economy, Paulo Guedes, was to extinguish other social programs, such as the salary bonus, and direct resources to the Citizen Income.
More than 1 million families
Bolsonaro prohibited changes in other social programs. And the allied parliamentarians decided to continue with the discussions so as not to abandon the proposal.
On Bolsonaro’s side, an interlocutor of the president points out, however, that there is no more commitment and willingness to discuss the matter and the solution is to maintain Bolsa Família.
For 2021, Bolsa Família has an estimated budget of R $ 34.8 billion and it would be necessary to increase this amount to increase coverage and serve the families identified as qualified by the technicians.
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The government has already predicted a higher Budget compared to 2020 (R $ 29.5 billion) due to the possibility of not having a Citizen Income. This amount is enough to increase the program by one million families, according to the government.
While looking for a way out of the end of emergency aid, the government’s political wing already admits that the reforms defended by the economic team will be maintained until 2021, because there is no more time for congressional approval.
After meeting yesterday between Bolsonaro and the government leader in the Chamber, Ricardo Barros (PP-PR), it was agreed that the Executive will try to approve, after the elections, the opening of the cabotage market (navigation between Brazilian ports), autonomy of the Central Bank and the creation of Casa Verde e Amarela.
Reforms: political decision
The most robust reforms, however, are in a water bath. A political interlocutor also considers that approving texts now or in the next semester makes little difference.
According to this source, Bolsonaro will not be personally involved in the articulation and will leave the economic agenda in the hands of the mayor, Rodrigo Maia (DEM-RJ), and Guedes, who would close the gap with the leaders of the allied parties.
New program: There is no alternative outside the spending limit for Citizen Income, says the source
The evaluation of the members of the economic team is that the country is in a fiscal emergency and that a political decision will be needed to accelerate the reforms starting next week, just after the first round of the municipal elections.
Without concrete action by the government to solve the public debt problem, resulting from the additional expenses to face the pandemic, sources say, economic indicators can deteriorate rapidly, reversing the trajectory of the fall in interest rates and accelerating inflation.
The economic team expects Bolsonaro to support the tax reform, accompanied by the creation of a transaction tax. The justification is that there will be no increase in taxes, but substitution to ease payroll and promote job creation, especially among young and old.
The assessment is that unemployment will haunt the government, because with the end of emergency aid and signs of resumption of economic activity, people will once again look for a place in the market, which will affect unemployment rates.
The comings and goings of the project
- Expansion of Bolsa Família
In July, Renda Brasil gains strength within the economic team. The objective was to create a program to increase the number of beneficiaries and amounts of Bolsa Família, but putting an end to other programs, such as the salary subsidy and the closed pension insurance.
In August, the Minister of Economy, Paulo Guedes, even announced that the program would be launched in a ceremony at the Planalto Palace. But disagreements over project funding and design postpone the ceremony.
In September, President Jair Bolsonaro vetoed the idea of ending the wage bonus to finance the Renda Brasil program, claiming that the measure would be to take “money from the poor to give to the poor.”
In the same month, the economic team admits that it is studying suspending pension adjustments for two years to free up budgetary resources for the program. Bolsonaro vetoes the proposal and “ends” Renda Brasil.
On September 23, lawmakers convince Bolsonaro to re-discuss a cash transfer program for 2021, now called Renta Ciudadana. The president agrees, but there are no sources yet to finance the idea.
Days later, the rapporteur suggests using precatorios (government debts recognized by the courts) and Fundeb (education fund) to finance the program. The negative reaction and criticism even from Guedes cause the government to back down from the idea.
