Pension Reform Has Not Been Abandoned

The Brazilian government did not abandon the pension reform bill, said the Finance Minister Henrique Meirelles in an interview with Radio Bandeirantes. According to him, the vote on the legislation was suspended, since Congress cannot vote on the topic while a federal intervention in the public security sector in Rio de Janeiro state rages on. 

Earlier this week the Brazilian government gave up on pursuing a House of Representatives vote on the pension reform bill. Last Friday, the Brazilian President Michel Temer decided in favor of federal intervention in Rio de Janeiro state security, giving the army control over police, fire departments and the prison system in the region. 

The decision acted as a hurdle to a House of Representatives floor vote on the pension system reform because constitutional changes are forbidden during intervention periods. Meirelles said he is not in favor of alternate plans to move forward with the pension reform, such as voting on parts of the bill which do not require a constitutional amendment. "At the moment, the bill is still on the agenda, and it will be back once the intervention is over, so I do not think that any alternative needs to be discussed," he said. 

Meirelles also said that the government would not adopt provisions to increase revenue due to pension reform bill vote suspension because the 2018 budget "is sustainable and the pension reform is something that would be more effective in the long term." He added that a tax increase might be warranted if lawmakers reject any pension reform, but "this is not feasible, and the reform can still be voted."