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Transition team wants cash transfer scheme outside spending cap

Transition coordinator and Vice President-elect Geraldo Alckmin said on Thursday that lawmakers will propose a constitutional amendment to extend BRL 600 (USD 117) payments from the federal government’s flagship cash-transfer program Auxílio Brasil through next year.

Before the election, the Bolsonaro administration’s 2023 proposal foresaw benefits dropping to BRL 405 a month. Currently and until the end of year, the government pays the poorest Brazilian households BRL 600 a month, a value made possible by the ‘Kamikaze Bill’ or ‘Desperation Bill’, which put Brazil in a state of emergency and allowed the government to create new expenses in an electoral year and bypass the public spending cap.

The temporary increase to the monthly value of President Bolsonaro’s flagship social policy was an electoral maneuver to try and court the poorest voters, which typically lean towards the Workers’ Party. The effort was largely unsuccessful: in relation to the 2018 election, the president only increased 2 percentage points in cities where over half of the population are Auxílio Brasil beneficiaries.

Senator Marcelo Castro, the rapporteur of next year’s budget in Congress, said that President-elect Luiz Inácio Lula da Silva’s transition team is “legitimately” amending the draft budget, in order to keep his electoral promise of a BRL 600 monthly stipend.

In his understanding, the expenses will require an additional yearly cost of BRL 70 billion, when factoring in an extra BRL 150 benefit for families with children under 6 years of age. This will contribute to an even larger deficit, which already stands at BRL 65 billion.

Last month, the federal government added over 480,000 households as recipients of Auxílio Brasil, for an overall total of more than 21 million. The government also pushed forward the payment schedule, ensuring all October cash transfers were handed out days before the runoff election last Sunday.
In the same press conference in the Senate, Mr. Alckmin said that the constitutional amendment proposal will be discussed with congressional leaders next Tuesday, after a meeting with Lula on Monday.

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