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Brazilian Congress debates budget target bill

December 4, 2014

SAO PAULO (AP) — Brazilian lawmakers wrangled in a marathon debate early Thursday over a bill that would free the government from its legal fiscal responsibilities concerning the budget by letting it avoid cuts to meet this year’s spending goal.

A vote had been expected Tuesday night, but was suspended after clashes among protesters, members of Congress and security guards disrupted the session. Debate resumed Wednesday and continued into Thursday.

The government’s primary budget surplus had originally been set at 1.9 percent of gross domestic product, meaning it would need to report $38.5 billion over expenditure before debt payments.

Brazil’s GDP is $2.25 trillion dollars, the seventh largest globally, according to the World Bank.

The legislation would allow the government to abandon the surplus goal altogether after Brazil accumulated a deficit of nearly $6 billion during the first nine months of the year.

Financial markets monitor this indicator to determine a country’s ability to repay loans.

If Congress fails to pass the bill, the government will have to cut spending in several areas such as infrastructure to achieve the budget surplus goal.

Without the cuts, Brazil’s government will be unable to meet its public debt interest payments that in October amounted to 2.1 trillion reals ($820 billion).

Brazilian Sen. Aloysio Nunes has said that the bill would free President Dilma Rousseff from the “legal consequences” of not meeting the government’s fiscal responsibility goals.

Update hourly