Watered-Down Pension Bill Clears First Vote in Brazil's Senate
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(Bloomberg) -- Brazil’s Senate concluded its first floor vote on a pension reform proposal that was weakened by a last-minute change, reducing the impact of President Jair Bolsonaro’s main initiative to tame a rising debt load.
Senators approved legislation that toughens access to retirement benefits by a tally of 56 to 19. In subsequent votes on bill amendments, they also backed a proposal to maintain an annual bonus to low-income workers that will reduce the reform’s estimated savings by 70 billion reais to about 800 billion reais ($192 billion) over a decade.
The proposal that sets a minimum retirement age now moves on to a second and final Senate floor vote later this month, which is the final step before becoming law. The measure is key to restoring investor confidence in Brazil’s finances, although it won’t stabilize the country’s debt as a portion of gross domestic product before 2023, according to official estimates. Brazil’s public debt currently reaches nearly 80% of GDP and is estimated to grow to as much as 83% of GDP over the next four years before stabilizing, if the reform is approved.
Luiz Eduardo Ramos, government affairs secretary, told reporters in Brasilia that the administration views the vote as a victory. He highlighted the fact that most of the amendments were rejected.
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