Six weeks before the Brazilian congress closes for holidays, the Brazilian government is at risk of ending the year without the approval of a major part of the measures it announced in the second half of the year to revert the deficit in public accounts which was forecasted for 2016.

The voting is behind schedule and that worsens the uncertainties regarding the fiscal scenario for the next year, which is already worrisome in the face of the perspective of a retracting economy and the doubts regarding the schedule of the payment of the so-called fiscal maneuverings, debts of the National Treasury with public banks.

The main adjustment initiative was proposed by the government’s economic team – bringing back the CPMF tax – is behind schedule in congress and will not be approved before December 22, when the congress and the senate close for holidays.

The PEC (Constitutional Amendment Proposal) does not even have a rapporteur in the Constitution and Justice Commission of the Congress, which is responsible for the first assessment of the projects that come to congress.

The project, which could generate an extra collection of R$ 32 billion (US$ 8 billion) for the public coffers, is facing much resistance and will have to be first evaluated by a special commission in congress and another one in the senate as well as two voting sessions by the plenary in the congress and the senate.

The procedure pace of the other PEC which is also important to control public accounts shows the size of the difficulties faced by the government.

The proposal to renew and increase the Disentail of the Government’s Revenues, a mechanism which gives more flexibility to budget management, was sent to congress in July and has only been approved by the Constitution and Justice Commission of the Congress so far.

Other proposals of the package have simpler procedures, but they are also impaired by the difficulties imposed by the crisis in the congress, where the government and the president of the lower house of congress, Eduardo Cunha (PMDB-RJ), are having a dispute.


Cunha is a target of the Operation Lava Jato and is accused of being a beneficiary in the corruption scheme in Petrobras. On Friday, November 6, he admitted having connections with suspected bank accounts in Switzerland, but said the origin of the money is legal.

In the next days, the Ethics Counsel of the Congress will decide if it will open process to remove Cunha from office. In an attempt to prevent his own loss of status and obtain allies, Cunha has impaired the procedures of projects that interest the government in congress.

Cunha has also played in the background with the prerogative that he has to debate on the ongoing impeachment process against President Dilma Rousseff.