The Mixed Budget Commission (CMO) of the National Congress approved, on Wednesday (3/12), the main text of the Budget Guidelines Law (LDO) of 2026. The opinion of Gervasio Maia (PSB-PB) presents a calendar that obliges the government of President Luiz Inacio Lula da Silva (PT) to push through most of the parliamentary amendments by the middle of next year – an election year.
Parliamentarians are now analyzing the salient points, which text-related motions should be voted on separately.
According to the opinion, which was symbolically approved, Palacio do Planalto must pay 60% of the transfers indicated by the members of Congress by July. The deadline was agreed upon after being widely discussed between the government and Congress and was one of the reasons for delaying the vote. Parliamentarians claim that the calendar brings more predictability in the distribution of amendments and, on the other hand, it reduces the negotiating power of the Palacio do Planalto.
Read also
-
economy
The LDO rapporteur expects a rule that minimizes emergencies and satisfies the government
-
Brazil
The LDO vote was postponed amid tension between the government and Congress
-
Brazil
Delays and rushes: Congress tries to open LDO this Tuesday (2/12)
The LDO is a set of guidelines and rules that dictate how the federal government spends the following year’s budget. The proposal is sent by the Palácio do Planalto, usually, in the first quarter of the year preceding the project, and must be voted on by the Marketing Director and then by the National Congress.
The rapporteur also eased the pressure on the government and decided that it would be able to follow the fiscal minimum target in 2026, without having to follow up with the Centre. This would be a way to avoid major emergencies. The fiscal target for next year is to achieve a surplus of 0.25% of GDP, or about R$34 billion, with a range of 0.25% up or down, meaning the lower bound is zero deficit.
This year, the Federal Court of Audit (TCU) decided that the government should go after the center of the target, not the lower band as was done. In the court’s view, the government was circumventing fiscal rules by not targeting a zero deficit, which had been set as a target for 2025. However, since it was aware that the budget was already underway, the TCU allowed the economic team to target the bottom of the target this year, but discussed committing to target the center in 2026.
According to the economic team, if the court upholds the decision, it will be necessary to freeze about 30 billion Brazilian reais in public accounts, which would cause the collapse of public administration.
Next steps
With the approval of the CMO, the LDO replacement must now be voted on in a joint session of the National Congress. President Davi Alcolombre (União Brasil-AP) should call a meeting of senators and representatives. The project then goes to the president’s approval.
The Office of the Chief Comptroller now has two weeks before recess to vote on next year’s annual budget bill before the parliamentary recess. The rapporteur, federal MP Esnaldo Bolhés (MDB-AL), is expected to present his initial report at the Chief Organization Officer’s session on Wednesday.