Brazil’s lower house of Congress may not vote on a landmark pension reform bill until August, leaders said on Friday, as intense negotiation over amendments delayed the process and reduced savings derived from the overhaul.
The government’s Pension and Labor Secretary Rogerio Marinho said that after amendments the bill is expected to save close to 900 billion reais ($240 billion) over 10 years if approved, down from the more than 1 trillion reais in savings the government initially sought.
The revision to the costly pension system is President Jair Bolsonaro’s flagship policy for cutting government spending and restoring health to public finances.
Following approval of the main text of the bill by an overwhelming margin on Wednesday, Congress took up consideration of amendments in a process that has taken far longer than predicted. Following amendments, the full text must be submitted to a final second vote.
Brazilian markets fell amid the delays. The benchmark Bovespa stock index receded 1.2% on Friday, the second day of declines after markets surged to record highs just after the main text of the bill was approved.
House Speaker Rodrigo Maia told reporters that, given the delays, a vote on the final text would be pushed to next week, when there might not be a quorum. That would mean the final vote could only happen in August after a July 18-31 recess.
Maia said he would prefer not to delay the vote but it was better not to rush, and that waiting 10 or 15 days more will not make a difference in the end.
“What we can’t risk is going to a second round and losing the vote,” he said.
Marinho predicted that the lower house would hold the final vote on the bill on Aug. 6, while the Senate would vote by September.
Raising the retirement age, increasing workers’ pension contributions and reducing some workers’ pension benefits have provoked strong opposition from some lawmakers.
But efforts to strip out savings could threaten efforts to close the country’s budget gap.
The government had initially sought savings of more than 1 trillion reais, with Maia predicting savings of 900-950 billion reais earlier this week.
Economy Minister Paulo Guedes warned last month that savings of around 860 billion reais would be insufficient, resulting in an “aborted” reform requiring another fix in five or six years.
Source: News Agencies