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Understanding the proposal of Transition Constitutional Amendment (“PEC da Transição”)

By Henrique Canary, from São Paulo (Brazil), translated from portuguese by Daniel Kraucher
Pedro França/Agência Senado

As the coupist roadblocks lose strength and more and more roads are reopened across the country, attention turns to the transition of government, a process that is also very complicated and full of traps, and which deserves all the attention from the left. Yesterday’s topic was the presentation, by the elected government’s transition team, of the so-called “PEC da Transição [a proposal of Constitutional Amendment with measures to be applied in the current transition of governments. t/n]. But what is it?

The Transition PEC is a Proposed Amendment to the Constitution that aims to make the spending ceiling flexible in 2023 to guarantee the financing of proposals considered essential for the new government, especially in the social area. It is also called a “waiver” or license. The general idea of the Transition PEC was presented yesterday (November 3rd) by the vice president-elect Geraldo Alckmin in a meeting with the budget rapporteur, Senator Marcelo Castro (MDB-PI). According to a joint statement made by Alckmin and Castro shortly after the meeting, the goal is to open a budgetary space for the payment of Bolsa Família [Family Support Grant Program] in the amount of R$ 600 throughout 2023, along with an increase of R$ 150 per child in school up to 6 years old, as well as other social expenses considered decisive, such as Popular Pharmacy, DNIT, school lunch, health and others. Castro, who plays a key role in the entire process, was sympathetic to the proposal, noting that the current budget is “certainly the most restrictive and the one with the most ‘holes’ in our history” (Source: Agência Senado). Elected senator Wellington Dias (PT-PI) added that the PEC would also aim to guarantee a real increase (above inflation) of 1.3% or 1.4% for the minimum wage in 2023.

In the press conference, neither Alckmin nor Castro spoke of total values. However, federal deputy Ênio Verri (PT-PR) presented some hypotheses of numbers. According to him, the total value of the PEC would be between 85 and 100 billion reais [R$], the majority for Auxílio Brasil [how Bolsonaro’s government came to call “Bolsa Família”. T/N]. This would more than double the resources allocated by Bolsonaro to the program in the current budget (R$ 70 billion). As Lula denounced many times during the campaign, the Auxílio Brasil effectively guaranteed by Bolsonaro’s budget is no more than R$405 on average. Without this PEC, therefore, the proposal of R$ 600 + R$ 150 per child would not be possible.

To pass this as a Constitutional Amendment is necessary because the government spending ceiling is set by the Constitution. As some may remember, the infamous PEC 95 was one of the first measures of Michel Temer’s coupist government and established that, for 20 years, the government could not increase spending above inflation. The Spending Ceiling PEC is still celebrated by the market as a sign of the country’s “fiscal maturity”, although no serious country has such a mechanism inscribed in the Constitution. The truth is that the Spending Ceiling Amendment is largely responsible for the brutal drop in social investments in the last 5 years.

The difficulty in presenting a Constitutional Amendment is that it requires two votes in the Chamber of Deputies and two in the Senate and the support of at least 3/5 of the parliamentarians. Alckmin pointed out that the Transition PEC needs to be approved by December 15th, which also makes the process difficult. Ministers of the Federal Court of Accounts (TCU) have already declared that they will not put any obstacles in the way of the approval of the new mechanism.

According to Alckmin e Castro, the proposal should be matured in a meeting with Lula on Monday (November 7) in São Paulo. At this meeting, the final decision should be made as to the total value of the PEC and the areas to be served. On the following day, November 8, there will be a new meeting between Alckmin and Castro to close the proposal. Negotiations with the presidents of the Chamber of Deputies Arthur Lira (Progressistas-AL) and of the Senate Rodrigo Pacheco (PSD-MG) are already underway, since the PEC still needs to be approved in this legislature. Another key figure that will very likely join the debate in the coming days is federal deputy Celso Sabino (União Brasil-PA), president of the Mixed Budget Commission.


As soon as the Transition PEC proposal was verbalized, the reactions of Bolsonarism and other political and economic agents began. Current vice president Hamilton Mourão used twitter to call the Transition PEC a “budget gap” and accused the elected government of “fiscal irresponsibility”. In an interview to Rádio Gaúcha, the now senator elected by Rio Grande do Sul classified the PEC as a “rape in the budget”. In turn, people linked to the market are worried about the possibility of a “PEC without limits”, something that no one has ever talked about.

Federal deputy and PT president Gleisi Hoffmann responded firmly, also on twitter: “Mourão’s statement is at least dishonest. We have barely begun the transition and we are negotiating the agenda that interests the working people. Where was he during the secret budget spree and wasteful and illegal use of the public machine in the elections”, questioned PT’s president.

Hoffmann’s response is accurate and goes straight to the point. The Brazilian elite only talks about fiscal responsibility to avoid social investments. It’s the most absolute hypocrisy. However, more than a mere discussion with Mourão, the whole episode alerts us to the difficulties that the Lula government will face and the way to overcome them. The Transition PEC is evidently progressive in the face of the bleak scenario in which the country finds itself. But cabinet negotiations are not enough to approve it. We will need people on the streets. At the same time, we must bear in mind that bolsonarism’s coup operations will continue now and throughout Lula’s term. The new Lula government needs to attract the support of the unquestionable majority of the nation. That’s where lies the real governance. For that, it needs to take social measures with a profound impact, related to wages, health, education, housing, environment, inflation and employment. This way, in the face of any more serious questioning of the government by the bourgeoisie, there will be those who defend it in the streets. The entire historical experience of Latin America and of Brazil itself proves it: this is the best – in fact, the only – antidote against coups.

Texto original

Tradução por Daniel Kraucher