Bending the constitution

Jair Bolsonaro’s use of constitutional amendments knows no bounds

Latin American leaders have a habit of viewing constitutions not so much as intractable legislation but more a guide to be amended where political considerations prevail. Brazil’s president Jair Bolsonaro (“Bolsonaro”) has taken this mindset to the extreme. The administration’s latest assault on the constitution saw congressional approval for an amendment (or “PEC” as its known by its Portuguese acronym) will see billions of BRL disbursed just three months before the election. Convenient timing for unpopular incumbent. Former president and current frontrunner Lula seems to think so.

A partner at a leading Curitiba-based law firm specialised in administrative law explained, “Bolsonaro is the president who has most recurrently used constitutional amendments during his mandate. He has constantly exaggerated political situations in order to force Congress to approve these amendments.”

“Bolsonaro is the president who has most recurrently used constitutional amendments during his mandate. He has constantly exaggerated political situations in order to force Congress to approve these amendments.”

Partner, administrative law, Brazil

Indeed, according to a compilation published last week by the newspaper O Globo, the administration has passed no less than 26 amendments. The number does not consider various other amendments passed during the Covid pandemic.

In the specific case of the most recent PEC, it is likely to be approved because no congressional bloc – including Lula’s Workers Party – will vote against increased social spending during a) an electoral period where members do not wish to lose their seats and b) because of the challenging inflationary context of the current financial crisis.

A senior economist at a São Paulo-based corporate finance consultancy firm explained, “Last year, congress passed a bill which approved a higher federal expenditure limit of BRL 110 billion – known as ‘Precatórios’ – which led to a rapid depreciation of the BRL. Instead of trying to find solutions to resolve the problem the government implemented a series of ‘bypass’ measures that acknowledged its levels of indebtedness.”

“Last year, congress passed a bill which approved a higher federal expenditure limit of BRL 110 billion – known as ‘Precatórios’ – which led to a rapid depreciation of the BRL. Instead of trying to find solutions to resolve the problem the government implemented a series of ‘bypass’ measures that acknowledged its levels of indebtedness.”

Senior economist, corporate finance consultancy, Brazil

The government is looking to grant BRL 600 cash transfers until the end of the year, when it is supposed to go back to BRL 400. This is unlikely to be enough for indebted households across Brazil which are dealing with soaring inflation whilst weighed down by increasing household debt.

During the pandemic, in April 2020, the government handed BRL 600 transfers. With current inflation levels, the equivalent would be BRL 720. Nonetheless, the administration wants to reduce this sum to BRL 400. Pundits say this is bad for the economy and clearly insufficient for struggling households. Instead of getting its fiscal policies right and focusing on the poorest who are facing food insecurity, the government appears to be playing politics as Bolsonaro continues to lag in the polls ahead of presidential elections in October.

“At this stage, it is already too late for the Supreme Court to overturn the PEC proposal of law, it failed to mention the state of emergency subterfuge used by the government in the proposal. All in all, I wouldn’t want to be in the shoes of the next government…,” adds the law firm partner.

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