Brazil's government has requested Congress to approve a budget reallocation of nearly 40 billion reais ($6.9 billion), increasing spending on pensions while reducing funds for the popular Bolsa Familia cash transfer program. In a letter to the budget committee, Planning Minister Simone Tebet explained that the adjustments reflect evolving priorities and emerging requirements. The government augmented spending by 39.6 billion reais while also enacting corresponding cuts in other areas.
Although the annual budget is typically approved by Congress in the prior year, this year's budget bill is still pending lawmakers' endorsement. The proposal includes reducing 7.7 billion reais from Bolsa Familia while suggesting an 8.3 billion reais boost in pension benefits. Additionally, it has earmarked an extra 3 billion reais for a cooking gas subsidy for low-income families, having initially planned to fund this program through offshore oil revenues via state lender Caixa Economica Federal, bypassing the primary budget.
Notably, there were no extra allocations to financially incentivize low-income high school students under the Pe de Meia program. This initiative, supported by President Luiz Inacio Lula da Silva, aims to retain students in school, following a decline in his approval ratings.
Recently, Brazil's federal audit court ordered the government to incorporate the program into the budget within 120 days, as initially attempting to finance it through an off-budget fund was regarded as a form of creative accounting that facilitated increased expenditure. The nation's largest economy is aiming for a balanced primary budget this year, with a tolerance margin of 0.25% of GDP, allowing for a deficit of up to 30.9 billion reais.
(Note: $1 = 5.8028 reais)