What is the public budget and why is it so important to control it

The public budget is very similar to the domestic budget, with due proportions, of course. It's nothing more than calculate what money comes in and goes out to pay basic expenses and invest in what is a priority. In the case of the government, When he earns more than he spends there is a surplus in public accounts. O otherwise results in a deficit. And therein lies the problem.

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This movement of money in and out is regulated by fiscal policy. This policy can be contractionary, Ou seja, one in which the government contains its financess, or expansionist, in which the government spend more and reduce taxes to stimulate the economy.

You can see that the level of complexity is infinitely greater than controlling a household's finances, it requires careful planning, which (thankfully!) doesn't just depend on the mood of whoever is in control.

The guidelines for preparing the budget are provided for in the Federal Constitution, in Budget Guidelines Law (LDO).

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Also according to the Constitution, the budget for the year must be made by the Executive power and authorized by Legislative power, in the form of a Annual Budget Law (LOA). The validity period coincides with the calendar year. The proposal is made by the Executive Branch in the year prior to its coming into effect, analyzed and approved by the National Congress, and sanctioned by the President of the Republic to then come into effect.

The Union, each state and each municipality prepare their budget annually. The Union's budget contains the amounts that the Federal government intends to spend on its operation and on the execution of public policies, such as health, education and security. Only the expenses provided for there may be incurred.

Budget Guidelines Law (LDO)

The Budget Guidelines Bill is drawn up by the Executive Branch and presented by April 15th of the year preceding the year to which it refers. After analysis and voting, the National Congress has until July 17th to return it to the Executive Branch for sanction.

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Annual Budget Law - LOA

The law presents the government spending schedule, as well as the revenue forecast to cover these expenses. The document has three parts: the Fiscal Budget, the Social Security Budget and the Investment Budget for State Companies.

The Annual Budget Law project is prepared by the Executive Branch and presented by August 31 of the year prior to its coming into force. After analysis and voting, the National Congress has until December 22nd to return it to the Executive Branch for sanction.

Budget Execution

After the Budget is published, the Executive Branch has up to 30 days to edit the Budgetary and Financial Programming Decree. Budget execution is the responsibility of the Ministries and other federal public bodies and entities receiving the resources.

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Throughout the year, decrees and ordinances may appear on Budgetary and Financial Programming, the execution of Parliamentary Amendments, Among others.

Monitoring of execution is carried out by the Federal Budget Secretariat, which is always reevaluating revenue estimates and expenditure progress, in addition to the economic scenario. Every two months, the body and the National Treasury Secretariat prepare the Primary Revenue and Expense Assessment Report.

*Photo: Marcelo Camargo / Agência Brasil*

The Ministers of Economy and the Civil House form the Budget Execution Board (JEO), responsible for providing direct advice to the President of the Republic in conducting the government fiscal policy and which makes decisions regarding the management of public resources on a monthly basis.

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Any citizen with internet access can consult updated information about the LOA, without the need for authentication, authorization or even prior registration. Federal Budget data is available in RDF format.

Spending ceiling

To reduce the budget deficit, which has been in the red for 8 years, the government approved the so-called spending cap for the Constitutional Amendment 95, in 2016, which limits Executive expenses for 20 years, corrected only by the inflation index, in this case the IPCA (Broad Consumer Price Index). Anything more than that must be negotiated with Congress.

Inflation: understand what it means and why it is important to monitor it