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News > Latin America

Brazil's Senate Passes PEC 55 Austerity Bill

  • A woman holds a banner that reads

    A woman holds a banner that reads "Temer Out." | Photo: Reuters

Published 29 November 2016

In his short time in office as an un-elected president, Temer has tried to roll back progressive measures carried out by Worker's Party leaders.

The Brazilian Senate has voted 65 to 14 for PEC 55, an austerity measure that will limit social spending for the next 20 years.

Mass Protests in Brazil Against Neoliberal Austerity

The controversial, neo-liberal constitutional amendment proposed by right-wing President Michel Temer means to freeze public spending in the country for the next two decades.

PEC 55, as the legislation is known, was already passed by the lower house and a committee in the Senate. On Tuesday, the first of two sets of voting took place in the Senate — the second round will be on Dec. 13. Each one has to be approved with a three-fifths majority.

However, at the beginning of the second session in Senate, the majority of senators who approved the bill will be entitled to cancel the session.

The reform, previously known as PEC 241, freezes public spending rates for the next 20 years by tying any increase to social assistance programs to the previous year’s inflation rate rather than GDP rates. This effectively limits what all future governments can spend on health, education and social welfare. Critics argued that the poor and marginalized in Brazilian society will disproportionately bear the burden of the cuts that will significantly undermine rights enshrined in the constitution.

Despite massive protests, senators have furthermore rejected the possibility of holding a referendum on whether to accept the reforms or not. Protests have continued while the vote moved through the Senate.

Brazil’s Congress Pushes Decades-Long Austerity Shock Therapy

The reform was championed by government officials, who argue it will help stabilize the economy and control the national debt. But protesters called it an austerity measure similar to those imposed by capitalist international financial institutions such as the World Bank and International Monetary Fund.

Critics also argued that it would be highly unlikely that Brazilian voters would ever opt to elect a government with a mandate to carry out such a controversial reform, reinforcing claims about the potential motivations underlying the ouster of former President Dilma Rousseff. After being installed as president, Temer even admitted in a meeting with business elites in New York that Rousseff was removed from office for refusing to implement an aggressive neoliberal agenda.

The vote came a day after demonstrators demanded Temer be investigated and impeached for the alleged role he played in pressuring a former culture minister to approve a property development, Reuters reported Monday. Brazil's socialist party has also filed a petition to launch an impeachment process against the unelected president in a largely symbolic gesture against his government, as it is unlikely to be accepted.

Since Temer slipped into office in August after backing the impeachment process — widely condemned as a parliamentary coup — that ousted former President Dilma Rousseff, his administration has introduced many sweeping privatization proposals and cuts to social programs. He and his office have also been mired in scandal after scandal, most notably to do with corruption charges.

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