Brazilian Government Proposes Funding New Social Program with Judicial Bonds and The Fund for Education

Experts consider diversion of resources an accounting maneuver that borders on default and hurts the spending ceiling

After negotiating with party leaders, the government announced a proposal for a new social program that will replace Bolsa Família, called Citizen Income. The project foresees using judiciary bonds and Fundeb (fund for education) to fund expanded assistance.

Judiciary bonds are government debts collected after a court decision. A large part of them is from INSS beneficiaries who had their retirements or pension adjusted by the court.

Brazil's Economy Minister Paulo Guedes speaks next Brazil's President Jair Bolsonaro during a press statement at the Alvorada Palace in Brasilia, Brazil September 28, 2020. REUTERS/Adriano Machado - REUTERS

According to advisers to Minister Paulo Guedes (Economy), the average benefit in the new program should be R $ 300, a goal given by Bolsonaro.

According to the 2021 Budget rapporteur, Senator Márcio Bittar (MDB-AC), in addition to the current Bolsa Família budget, the government foresees two other sources of funds for the program.

According to Congressional technicians, the first is the limitation of expenses with judiciary bonds to 2% of current net revenue - which in 2021 will be equivalent to approximately R $ 16 billion.

On another front, the plan proposes that part of Fundeb's budget increase be shifted so that the program's beneficiaries can keep their children in school.

Assistants to congressional leader Rodrigo Maia (DEM-RJ) consider that financing the Citizen Income with resources destined to the payment of court orders is unacceptable and classified the measure as default.

Also, they said that they consider that the use of Fundeb resources to supply the program disrespects the spending ceiling.

Translated by Kiratiana Freelon

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