Why Dino blocked part of the PLP amendments before Lula evaluated it

The decision by Minister Flávio Dino, of the Federal Supreme Court (STF), to suspend sections of a project that aimed to resurrect old amendments to the “secret budget” came even before the document reached President Luiz Inácio Lula da Silva (PT) for a possible veto. The injunction which directly affects article 10 of the Complementary Draft Law (PLP) 128/2025 is already valid and will only be analyzed again by the Supreme Court on February 13, in virtual plenary.

The measure is possible because it was analyzed within the framework of a mandate presented by federal deputies and the Rede Sustentabilidade party. The parliamentarians pointed out the danger of the validation system for resumption of payments linked to the rapporteur’s amendments, those of RP9.

Mandamus, an instrument used by deputies and analyzed by Dino, serves to protect liquid and certain rights against any violation due to illegality or abuse of power on the part of public authorities, not supported by Habeas Corpus.

Sanction

The decision was made even before Lula authorized the project. The Minister has determined that, if the project is sanctioned, the effects of Article 10 will nevertheless remain suspended until the final judgment of the writ of mandamus or a possible reconsideration of the injunction.

The PLP was approved by Congress last Wednesday (12/17) and provides for a reduction of at least 10% in federal tax, financial and credit benefits. The text was then sent for presidential sanction.

According to the decision, the contested provision allows for the revalidation of unprocessed outstanding balances recorded from 2019, including amounts already written off, allowing their settlement by the end of 2026.

STF has already decided

In the assessment of the rapporteur of the file, as well as the parliamentarians who filed the appeal, there are indications that the measure allows the resumption of expenses related to the rapporteur’s amendments (RP-9), known as the secret budget, the execution of which has already been declared unconstitutional by the STF due to the lack of transparency in the execution of public money.
In the decision, Dino states that “the revalidation of unprocessed or already canceled arrears relating to the type of parliamentary amendment declared unconstitutional by this STF — the so-called ‘Rapporteur’s Amendments’ (RP 9) — appears incompatible with the established legal regime. In fact, care is taken to resurrect the type of amendment whose very existence has been considered unconstitutional.”
For the minister, in practice, the project attempts to reactivate a form of expenditure whose very existence was prohibited by the Court.
The rapporteur also emphasizes that unpaid balances already canceled no longer legally exist. According to him, “the regularly canceled outstanding balances no longer exist legally” and their revalidation “is equivalent, in practice, to the creation of a new expenditure authorization, devoid of support in the current finance law”.

Dino adds that the measure breaks the chain of regulation of public finances by dissociating the execution of expenditures from budget planning.

The decision also highlights the tax impact of the proposal. Dino notes that the PLP expands the scope of revalidation by removing the limits provided for in previous legislation, which he says “increases the risk for tax liability, as it is no longer a reasonable and exceptional transition regime, but rather a measure with a broad fiscal impact.”

In the text, the minister makes direct reference to the current situation of public accounts and the duty of the powers of the Republic to act to preserve budgetary balance.

“The context in which the legislative proposal takes place is marked by serious fiscal difficulties, which impose on all the powers of the Republic the constitutional duty to collaborate actively to preserve the budgetary balance,” he wrote. Dino further asserts that “all three powers face an urgent duty to comply with constitutional requirements for fiscal responsibility.”

The rapporteur also mentions that a work plan is underway at the STF to remedy the distortions of the secret budget, but emphasizes that there is no provision to reactivate canceled expenditure.

“In such a Work Plan, however, there is no provision regarding the possibility of ‘resuscitation’ of unpaid sums to be paid, which shows that the discipline now contested goes beyond the institutional parameters and objectives set jointly, by the 3 Powers, to overcome the unconstitutionalities recognized at the time”, he considered.