Bolsonaro takes power from Guedes so Ciro Nogueira honors downtown amendment agreement – 01/13/2022 – Mercado

The decision by President Jair Bolsonaro (PL) to give power to the Civil House in the execution of the 2022 Budget is seen within the government as a way to create a “political filter” to ensure compliance with agreements involving the distribution of resources, including parliamentary amendments.

As revealed to leaf, the portfolio commanded by Ciro Nogueira (PP), chief of the center, will now need to give prior approval to changes made to the Budget. The change has been interpreted as a loss of power by the Minister of Economy, Paulo Guedes, who was previously solely responsible for the task.

The measure comes in the year that Bolsonaro intends to seek reelection and comes shortly after the episode of lack of funds at the end of 2021 to honor amendments negotiated with congressmen. The cut in resources aroused the ire of congressmen and incited tensions between the economy and the political wing of the government.

The decision to leave the pen also in Nogueira’s hands puts an exponent of the centrão, a bloc of parties that gives political support to the president, in a privileged position to define how the federal money will be spent.

The objective, according to government interlocutors, is to ensure that the agreements signed between the Planalto and the National Congress are fulfilled, at the same time that they must fit into the available space for expenses.

In addition, the government wants to prevent ministers from having an incentive to carry out parallel negotiations with Congress, boosting expenses in their portfolio, even if this means contemplating strongholds of parliamentarians opposing the government.

On the radar of defenders of the measure is a possible use of these “side agreements” to boost the image of politicians who currently occupy executive positions and intend to run for elective office in 2022.

In the opinion of these interlocutors, these arrangements —which would be unknown even to the Civil House — contribute to raising the so-called rapporteur’s amendments to values ​​above what was agreed with the government and what the Budget includes.

Rapporteur amendments are an instrument used by parliamentarians to boost the resources distributed to their electoral bases.

The biggest example of this “disconnection” would be the 2021 Budget, approved with more than BRL 30 billion in rapporteur amendments, while the agreed amount would be BRL 16 billion.

At the time, the Ministry of Economy asked for a veto of almost R$ 20 billion. Congressmen reacted by asking for the heads of two members of Guedes’ team, Waldery Rodrigues (Farm) and George Soares (Budget), who ended up leaving their positions.

In the 2022 Budget, the “parallel arrangements” would have taken the amendments to BRL 24.9 billion, above the BRL 16.5 billion combined with government coordination. Hence the need, pointed out by the Economy, to cut almost R$ 9 billion to recover underestimated expenses in other areas, as revealed by the leaf.

With the new formatting of the Budget discussions, the idea is for the Civil House to carry out a scan to identify what was actually agreed upon by the government.

Today, Nogueira and Guedes are part of the JEO (Budget Execution Board), responsible for broader decisions, such as the total amount to be spent by a ministry. Now, the Civil House will have to give a favorable opinion to changes in each budget expense line.

Since Thursday (13), when the leaf revealed the change, technicians try to minimize its repercussion, although they admit that it can be interpreted as a loss of power of the economy in budget decisions.

Behind the scenes, government sources work to remove this image and claim that the Ministry of Economy participated in the discussions about the measure, which has been in the works for two months.

The discourse is that strengthening the Civil House in budget decisions is a natural path after the junction of the Budget areas, which takes care of expenditure programming and belonged to the extinct Ministry of Planning, and the Treasury, which is responsible for the cash government and was part of the Ministry of Finance. Now, it would be the incorporation of the political arm into Budget decisions.

The Minister of Economy himself, however, has already publicly acknowledged, on different occasions, that Bolsonaro’s support for his agenda, initially at 100%, is now lower.

In September 2021, Guedes said that, with the action of the political component, the government was 60% in the right direction. More recently, that behind-the-scenes rating has dropped further, almost breaking the 50% barrier.​

Government interlocutors also state that, in the previous model, the Economy alone assumed the political wear and tear of asking for the cut of resources. Now, the Civil House will participate in the decision and share the burden of choices. Today, the preferred target of criticism is the economic team.

In addition, Nogueira’s portfolio will be involved in the analysis to verify whether, from a political point of view, the resources are irrigating the actions previously agreed with the government’s command.

The lack of funds for amendments at the end of last year, for example, triggered a crisis with the Republicans, one of the parties of the government’s allied base. Parliamentarians expected to receive R$ 600 million, but the resources were not released by the Economy.

The execution of the amendments was precisely the epicenter of the dispute, which led to the frying of the Chief Minister of the Secretariat of Government, Flávia Arruda, who had pledged her word that the payments would be made.

Now, with the prerogative of giving prior approval or not, the Civil House will have the power to define details, such as which actions within the folders should be prioritized in the distribution of resources.

Nogueira’s portfolio also gains greater control over the changes requested by Congress in the execution of the so-called rapporteur’s amendments. Today, these changes are concentrated in the hands of the Economy.

In the previous three years of Bolsonaro’s administration, only the Ministry of Economy was responsible for the measures to implement the spending, as is usually the practice in these cases.

Technicians in the economic area admit they are not aware of precedents for the Civil House’s participation in this stage, which involves operational details, in addition to the allocation of financial limits and resources in the ministries.

Between 2019 and 2021, the decree, issued annually, only gave Guedes the power to make operational changes. There is the expectation, however, that the entry of the Civil House at this stage can bring a “government vision” to the execution phase.

The definition of fiscal limits, to ensure compliance with rules such as the spending ceiling (which limits the advance of expenditures to inflation) and the primary result target (which results from the difference between collection and expenditures), will continue to be given by the Economy , said a government source.


Shared power over the Budget

How was before? Between 2019 and 2021, President Jair Bolsonaro delegated to the Minister of Economy, Paulo Guedes, the responsibility for acts related to the execution of the Budget, such as rearrangements and definitions of which actions would receive resources.

At the end of last year, for example, the JEO (Board of Budget Execution) set a limit of R$ 3.6 billion for the payment of debts with international organizations, but the decision of which institutions would receive the money was taken by the Economy.

Other ministries could also request relocations from one action to another, within their own portfolio, according to availability and need. It was up to the economic team to edit the acts to implement these changes.

How is it with the decree? The Civil House will need to give prior approval to the budget execution decisions. In practice, the portfolio commanded by Ciro Nogueira (PP), one of the chiefs of the center, will have the power to approve or not changes in the ministries’ spending, in the smallest details.

Nogueira will be able, for example, to give an opinion on which actions within the folders should be prioritized in the distribution of resources. The minister, who is also a member of the JEO, currently only participates in broader decisions, such as total amounts to be spent by each ministry.

what the change represents? Government interlocutors claim that the decree inserts a “political filter” in the Budget, to ensure that agreements signed with Congress are honored. Technicians admit that the change can be interpreted as Guedes’ loss of power, although the minister’s interlocutors seek to dispel this image.

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