Brazil's Senate Committee Approves Reform to Cap Public Funds

The Brazilian constitutional affairs committee in the Senate approved the PEC 55 constitutional reform to create a 20-year ceiling for federal spending Wednesday.

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The committee voted 19-7 and approved PEC 55, previously called PEC 241, which was proposed by coup-imposed President Michel Temer in an attempt to reduce Brazil's budget deficit.

The amendment limits the growth of government spending for each year to the inflation rates of the previous year, and will no longer be dictated by GDP revenue growth.

The text was previously approved by the lower house of Congress and will now face two sets of voting, with all members of the chamber, on Nov. 29 and Dec.13.

The senators rejected an amendment proposal to establish a future referendum to determine whether PEC 55 should be approved by the majority of Brazilians.

This proposal will institutionalize neoliberalism and force all future governments to limit expenditures in health, education, social welfare and public services for the next two decades. The spending ceiling could be revised by another government after 10 years.

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The change in the numbering of the reform, from PEC 241 to PEC 55, does not necessarily imply a change in the proposal and the modification is only to organize the reform system within the Senate.

Brazil’s public debt in 2015 represented 66.2 percent of the country's GDP, according to Brazil's Central Bank. The Temer government promotes the idea that these are unsafe levels of debt, not only in the region but worldwide.

Students have organized an occupation of 1,108 public schools and universities across 19 states, to protest against these austerity measures.