BRASILIA (Reuters) – Brazil’s government has asked Congress to approve a nearly 40 billion reais ($6.9 billion) budget reallocation, boosting spending on pensions while cutting funds for the popular Bolsa Familia cash transfer program.
In a letter to Congress’ budget committee, Planning Minister Simone Tebet said the changes reflect shifting priorities and new needs. The government added 39.6 billion reais in spending while making equivalent cuts elsewhere.
Congress typically approves the annual budget in the preceding year, but this year’s budget bill has yet to receive lawmakers’ approval.
While cutting 7.7 billion reais from Bolsa Familia, the government proposed an 8.3 billion reais increase in pension benefits.
Among other changes, it also allocated an additional 3 billion reais to a cooking gas subsidy for low-income families after facing criticism last year for initially planning to fund the program through offshore oil revenues channeled via state lender Caixa Economica Federal, bypassing the primary budget.
But the government did not add extra funds to financially reward low-income high school students under a program aimed at keeping them at school, known as Pe de Meia, which President Luiz Inacio Lula da Silva has been promoting as a flagship initiative following a sharp decline in his approval ratings.
Brazil’s federal audit court recently ruled the government has 120 days to integrate the program into the budget after it initially sought to finance it through an off-budget fund, a move critics also called creative accounting to enable more spending.
Latin America’s largest economy is targeting a balanced primary budget this year, with a tolerance margin of 0.25% of gross domestic product (GDP), allowing for a deficit of up to 30.9 billion reais.
($1 = 5.8028 reais)
(Reporting by Marcela Ayres; editing by Diane Craft)
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