Mourão recognizes difficulties in sources of funding for Renda Cidadã

BRAZIL POLITICS - Report 01 Oct 2020 by Murillo de Aragão and Cristiano Noronha

Adopting the same position as the Minister of the Economy, Paulo Guedes, Vice President Hamilton Mourão said today that the government “probably” will not use resources from court order payments or Fundeb to finance the Renda Cidadã. According to the Vice President, there are only two alternatives for financing Renda Cidadã. The first would be to reallocate budget funds, and the second is to negotiate with Congress an exception to the spending ceiling.

In this context, there is speculation in the media that the so-called "political wing" of the government is considering creating a new tax as a possible solution, linked to the new social program. Despite the rejection of a new tax, the measure will have a chance to advance in Congress if the justification is to reinforce social policy to protect the most vulnerable portions of the population. At the same time, it would also be necessary to cut expenses.

Although the fiscal issue is important, the creation of the Renda Cidadã program puts pressure on the government, as the most recent polls show that President Jair Bolsonaro’s popularity is mostly concentrated among those with lower levels of income and education.

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