On Thursday (4), the National Congress approved the LDO (Budget Guidelines Law) of 2026, which authorizes the Lula Government (PT) to pursue the minimum target of the primary result instead of the Centre, allows the Post Office to spend up to R$10 billion outside the fiscal target of SOEs and obliges the Executive to pay 65% of the parliamentary adjustments before the elections.
Only the Novo party announced the vote against it.
The LDO is approved annually and sets out the guidelines to be followed when preparing the budget. The vote was supposed to take place by July this year, but was postponed amid clashes between the government and parliamentarians. The annual budget law for 2026 is expected to be voted on as of the 15th.
During the vote on Thursday, Deputy Rapporteur Gervasio Maia (PSB-PB) included the measure that benefits Curios. In practice, the company could run a deficit of R$10 billion next year without generating any need for compensation from the government, such as containing expenses with other public policies.
Curios approved the restructuring plan two weeks ago. To finance these initiatives and rebalance its financial position, the company is negotiating with public and private banks to obtain a loan worth 20 billion Brazilian reais, as revealed. Bound In October.
It was also agreed to include in the LDO the measure proposed by the opposition, which prohibits, with exceptions, increases in tax spending, the creation of new mandatory expenditures and the creation of any type of funds to finance public policies.
The fiscal target for 2026 expects a surplus of 0.25% of GDP, equivalent to a positive balance of R$34.3 billion. However, the tolerance margin allows the effective result to be zero. Moreover, there are expenses that fall outside the tax rules. The final balance of the accounts could represent a primary deficit of R$23.3 billion.
Without this measure, the economic team will run the risk of having to cut up to R$34.3 billion in expenditures to reach the target position, if there is a frustration in next year’s revenue forecasts – a tangible risk, given the pending approval of revenue measures in Congress.
The inclusion of the license in the minimum target was clarified between the Executive and Rapporteur Gervasio Maia after the TCU (Federal Court of Audit) warned the government that basing financial management decisions on the minimum financial target is illegal when the law explains the position as the target to be pursued.
This understanding was adopted in 2025 because this year’s LDO cited the center of the target as a reference. That is why the change in text for 2026 is very strategic for the government, as is the change already approved in this year’s law.
The TCU itself admitted, in a decision taken by the plenary on Wednesday (3), that the change in the LDO ultimately frees the government to pursue the minimum target, even if this means a path towards greater growth in the country’s public debt.
Congress kept in place the measure approved by the Mixed Budget Committee on Wednesday, which benefits parties and causes a $1 million impact on the general treasury.
At the request of Rep. Luiz Carlos Mota (PL-SP) and under the rapporteur’s protests, the Commission agreed to retroactively readjust the party’s fund, since 2016, according to the fiscal framework rule (increase up to 2.5% above inflation annually), which will give the parties about an additional R$160 million.
Regarding the push of the parliamentary amendments, there was a clash between Lula’s government and the centre, which claimed to have the votes to force the push of all the amendments by July 4, 2026, but agreed to a 65% agreement – and the executive ended up capitulating by agreeing to write the voting calendar explicitly into law.
A 100% requirement would constrain the government in budget management and require it to reduce its own investments to prioritize adjustments. Therefore, the executive authority warned that it would veto this article if approved and proposed a 60% rate, which ended up being increased.
Gervasio Maia downplayed the extent of the dispute, pointing out that the approved text was created by Palacio do Planalto and thanking Minister Gleissy Hoffmann (Institutional Relations).
The payment deadline applies to individual adjustments and seats, the implementation of which is already mandatory, and specifically intended for health and social assistance. It also includes “PEX” adjustments (also known as private transfers, which are less bureaucratic when transferring to states and municipalities).
Thus, the rule does not include amendments from House and Senate committees — which serve the political administration of Congress and the government is no longer obligated to implement them.
According to the rapporteur, there is an agreement concluded by the President of the Chamber, Hugo Motta (Republicanos-PB), with the government so that 50% of the adjustments of the Committee ad hoc for health will also be paid by July, but without recording these expectations in law.
The first time the payment schedule for the amendments was approved, for the year 2024, the government objected to it and was then able to negotiate so that the matter would not be addressed by law, in exchange for a commitment to adhere to the schedule by decree. But in 2025, the government and Congress returned to conflict over the amendments, with complaints about delays.
In Thursday’s session, Congress also analyzed five presidential objections, and maintained most of them, in an agreement between the government and the opposition. Among the objections to the abolition was the requirement to undergo a toxicity test to obtain the first license for motorcycles and passenger cars, which is now in effect.
The veto of the law exempting Embrapa (Brazilian Agricultural Research Foundation) from fees related to registration applications and the protection of research experiments, products and technologies was also overturned.