* President's proposal would add decade to retirement age
* Divided legislature to debate reform
* Tough negotiations with unions loom
By Anthony Boadle
BRASILIA, Dec 15 A pension reform proposed by
President Michel Temer that would add more than a decade to
Brazilians' working lives will be debated in Congress after an
overnight vote that laid bare divisions among lawmakers over the
Pension reform is the next move by Temer to bring a widening
budget deficit under control after he won approval from
lawmakers on Tuesday to cap increases in public spending at the
rate of inflation for 20 years.
The lower house's constitutional affairs committee voted
31-20 to accept the new bill for debate early on Thursday after
10 hours of delaying tactics by left-wing parties opposed to its
The proposal, which still faces an uphill path to win
approval, sets a minimum retirement age of 65 in a country where
people work on average until 54.
Social security costs make up about 40 percent of the
government's spending before debt payments. They are a major
cause of an increasing public debt and considered a threat to
Brazil's future finances.
Balancing government accounts is essential if Brazil is to
revive business confidence in an economy stuck in a two-year
recession and recover its investment grade credit rating.
A special commission to study the pension reform will be set
up in February after congress returns from its holiday recess.
But the proposal, which would amend Brazil's constitution,
faces fierce opposition from labor unions of all political
Temer's administration has also been weakened by corruption
allegations against his administration that could derail his
reform plans. He took office just six months ago, replacing
impeached leftist president Dilma Rousseff with a promise to
clean up government and balance the budget.
Negotiations with unions over the pension reform are
expected to resume in February, once lawmakers have elected the
new leaders the Senate and lower house of Congress.
In another proposal to revive Brazil's finances, the Senate
on Wednesday passed measures to help cash-strapped states,
allowing them to suspend debt payments to the federal government
if they limiting spending and pursue privatizations. The lower
chamber must still approve changes to the bill.
(Reporting by Anthony Boadle; editing by John Stonestreet)