PT evaluates closing proposal for ceiling in nod to the financial market

The PT candidate for President, Luiz Inácio Lula da Silva, is preparing to present a new fiscal rule to replace the public spending ceiling. According to allies, Lula is rehearsing the release of this program in this second round in a nod to the financial market, which has criticized the lack of concrete proposals regarding a new fiscal anchor.

Posted by

João Caminoto

October 5, 2022 08:44 AM

Economists working on the campaign have already presented a proposal to Lula, but the details have not yet been released. In the first round, the campaign refused to say what it placedaria in place of the spending cap, but now points to the second round as strategic for concluding a government plan, abandoning the exclusive focus on the memory of the past and attacks on the president and candidate for re-election Jair Bolsonaro (PL).

And what is the spending ceiling? (g1)

In general terms, Lula should propose a rule that guarantees a brake on public spending in times of growth, and release of resources in periods of recession, with the aim of not strangling public investments. In this way, argue members of the PT campaign, it would be possible to abandon the current ceiling (which prevents any growth in expenses above inflation) and, still, signal a commitment to the fiscal health of public accounts. The assessment is that the ceiling rules approved in 2016 were broken by the Bolsonaro government itself, which would have only limited spending but without controlling public debt and other fiscal results.

Lula's economist: 'We will revoke the ceiling and create a new fiscal framework'

PT's economic advisor, Guilherme Mello, avoids giving details about the economic program of a possible Lula government. Regarding the tool that will replace the spending cap if the former president is elected, for example, Mello says that making it explicit meansaria a threat to the credibility of the campaign, given that it is necessary to know the formation of the National Congress in order to dialogue with parliamentarians about the new fiscal framework.

“They said we broke the roof. This is fake news”, says Paulo Guedes

The Minister of Economy, Paulo Guedes, stated this Wednesday, 28th, during his participation in the Pânico program, that the spending ceiling impeded the government's economic growth. According to him, the statements that the tax rule was disrespected are fake news. “They said we broke the roof. This is fake news. The ceiling was for the government not to grow and we weren’t growing,” he stated. According to Guedes, the spending ceiling was an unfinished work, a house without walls, with the floor compressing the ceiling with the increase in expenses.

Lula is expected to meet this Wednesday (5) with governors, deputies and senators elected in São Paulo to design a strategy for the electoral race in this second round. The campaign will establish regional tasks, incorporate proposals from the MDB and PDT into the government program and signal that the PT candidate wants to win the elections with more concrete proposals.

(with Estadão Content)

This post was last modified on October 5, 2022 08:44 pm

João Caminoto

Journalist with more than 30 years of experience, I held various positions - from reporter to international correspondent to editorial director - in several publications, such as Estadão, Broadcast, Época, BBC, Veja and Folha. I feel privileged to have embraced this profession. I am in love with my family and Corinthians.