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December 18, 2020

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BRAZIL: Crucial House election will be late nail-biter and hold agenda hostage

BY Mario Marconini

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( 4 mins)
  • There will be no vote on reforms or fiscal measures until after the February elections for congressional presiding officers.
  • The vote in the House politically pits President Jair Bolsonaro against Speaker Rodrigo Maia.
  • One of two centrist candidates will win the run-off election by a small margin; the result will reflect parties’ level of trust in the government.

As noted previously, progress on the reform and financial sustainability agendas will only resume in Congress after the February elections for House Speaker and Senate Chairman. At the beginning of December, there was a hope that the Supreme Court (STF) might “facilitate” matters by allowing, contrary to literal language in the Constitution, the re-election of both presiding officers – which could possibly help clarify the situation and clear some space for serious negotiations before year-end. However, the decision by Supreme Justices was against such re-elections.

Since then, talks have continued on the tax reform, an emergency constitutional amendment that would restructure spending, and over a new cash transfer program for Bolsonaro to call his own. However, talks were not serious. It was instead just a face-saving exercise for those who felt the need to look like they had done all they could to advance the economic agenda. This was clearly the case of Maia who, after “losing” at the STF, had to re-order his strategy to salvage his reformist legacy. Maia still talks about voting on the unification of two federal social contributions (PIS and COFINS) as a first step towards the tax reform. This will not happen until Tuesday, 22 December, the final stop for Congress in 2020. Not even an extension of Covid-related emergency assistance will see the light of day before then.

Congress will finalize the vote on the Budget Directives Law (LDO) this week and thus avoid having to cancel the official congressional recess (from 22 December to 1 February). Politicking will by no means stop during the period – on the contrary. Elections in Congress should occupy all of the political agenda, with or without a recess, right up until actual voting in February. In the House, where the race indirectly pits Bolsonaro against Maia, the stakes are high and centrist forces are fighting among themselves for primacy. In the Bolsonaro camp, Arthur Lira from the progressive party (PP) is the candidate. In the Maia camp, two candidates are still competing – the tax reform joint committee rapporteur Aguinaldo Ribeiro, also from the PP, and the author of the tax reform constitutional amendment, Baleia Rossi from the Brazilian Democratic Movement party (MDB).

Lira seems to be ahead so far. Bolsonaro has supported him as the government candidate for months now, and Lira has been able to attract most of the parties that allegedly constitute the government’s base in Congress. His strength, of course, derives from his proximity to the source of all pork and patronage – the president willing, of course. Maia is likely to pick Ribeiro as his candidate. Ribeiro’s advantage over Rossi comes down to his capacity to bring the leftist opposition in the House with him already in the first round – especially the Workers’ Party (PT), which may prefer to side early with the stronger anti-Bolsonaro candidate and enhance his chances of prevailing over Lira.

Since the vote is secret, pre-announced party alliances may not hold in full at the time of actual voting. This is why it will be difficult to call a winner before all votes are counted. Lira’s apparent head-start may weaken before then, particularly after Maia decides on a candidate. It should be noted that those that might vote for Maia’s candidate to ensure the “independence of Congress” will not effectively play opposition to the government. All centrist forces favor different shades of reform and, most importantly, would like to extract benefits from the government. What needs to be decided is which centrist contender will be the most efficacious in doing so: the amicable (Lira) or the confrontational (Maia’s pick).

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