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The government is preparing a spending cut plan that could impact Bolsa Família, Proagro, INSS and BPC, with a projected savings of R$20 billion with just one measure. See how this proposal will be presented to President Lula after the second round!
After the second round of municipal elections, the president Luiz Inácio Lula da Silva will receive a series of cost-cutting measures proposed by the team Valuation, according to information provided by the Minister of Planning and Budget, Simone Tebet, this Tuesday (15). Bolsa Família, Proagro, INSS and BPC will be affected.
The aim of the measures is to ensure compliance with the fiscal targets set for the coming years. The announcement came after a meeting between Tebet and the Minister of Farm, Fernando Haddad, where they discussed the proposals to be sent to the president.
Tebet did not reveal specific details of the measures, but highlighted that most of the actions will depend on the approval of the National Congress. It will be up to Lula to make the final decision on which measures will be sent to the Legislature.Brazil has already done its homework on the revenue side, it is no longer possible to solve the fiscal problem through revenue”, said Tebet, referring to the need to reduce spending to achieve fiscal balance.
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R$20 billion spending cut
During the press conference, the minister revealed that one of the measures, if approved by Congress, could result in savings of R$20 billion per year. However, she did not go into details about what this specific measure would be. Tebet assured that the spending cut plan will be crucial to achieving the established fiscal goals, which include a zero deficit in 2024 and 2025 and a surplus of 0,25% of GDP in 2026.
The fiscal framework, according to the minister, will remain unchanged.The fiscal framework is in place and will remain in place. There is no indication of any changes being made. Consequently, Brazil must fit within the fiscal framework.”, he highlighted. This reinforces the idea that the government is committed to fiscal responsibility, seeking ways to balance the budget without increasing revenue.
Measures depend on Congress
According to Tebet, the spending review measures will be sent to Congress in 2024. The minister said that the proposals will include ordinary and supplementary bills, as well as proposed amendments to the Constitution (PECs). She also mentioned the possibility of using amendments already under consideration in Congress to speed up the process.
Even with the possibility of saving R$20 billion annually, the economic team does not work with a fixed savings target. Tebet emphasized that the spending reviews will not take away acquired rights.The spending review will not take away a single right. We are not closing a R$100 billion, R$50 billion or R$80 billion budget.”, explained the minister.
R$26 billion budget cut plan
In August, the Ministry of Finance and the Ministry of Planning had already presented a plan to cut R$26 billion from the 2025 budget.
This plan focuses on actions that do not require congressional approval and aims to improve public management and reduce fraud. Of this total, R$19,9 billion will be saved through reviewing registrations and another R$6,1 billion will be reallocated from internal funds in ministries, especially in areas such as Bolsa Família and the Agricultural Activity Guarantee Program (Proagro).
Most of the R$19,9 billion in savings will come from the National Institute of Social Security (INSS), with R$7,3 billion in cuts. Of this amount, R$6,2 billion will be saved through a thorough review of the Atestmed system, which grants sick pay through digital medical certificates without the need for an in-person examination. An additional R$1,1 billion will be saved through administrative and precautionary measures.
Review of BPC and INSS benefits
Another focus of the government will be the Continuous Benefit Payment (BPC), whose expenses grew significantly and led the government to block R$11,2 billion in discretionary spending in the middle of the year.
With the update of Single Registry for Social Programs (CadÚnico) and the reassessment of expertise, the government expects to save R$6,4 billion in 2024. In addition, the review of the granting of disability benefits at the INSS, which includes sickness benefit and disability retirement, should generate additional savings of R$3,2 billion.
Expectations
By implementing these measures, the government hopes to reduce mandatory spending while freeing up resources for discretionary, non-mandatory spending. This could mean more room in the budget for investments in priority areas such as infrastructure and social development.
The R$26 billion spending cut, already in its initial phase, is seen as an important step towards improving the quality of public spending, one of the government's main objectives.We are committed to improving management and ensuring that public resources are used efficiently.”, said Tebet.
With these actions, the economic team aims to ensure compliance with the fiscal targets established for the coming years, without resorting to revenue increases or withdrawal of rights.
