August 28, 2017 / 8:03 PM / a year ago

Brazil's pension overhaul on back burner, says government whip

BRASILIA, Aug 28 (Reuters) - Lawmakers will not take up President Michel Temer’s bill to reform Brazil’s costly social security system until the second half of September at the earliest, the government’s chief whip in Congress said on Monday.

“We haven’t lost sight of it but it is not on the immediate agenda,” congressman André Moura told Reuters in an interview.

Brazil’s budget deficit has reached almost 10 percent of the country’s output and pension reform is Temer’s main measure to bring it under control to avoid another downgrade by credit rating agencies and get a stagnant economy growing again.

But Moura said the government does not have enough votes to pass the unpopular measure right now and lawmakers will focus on secondary economic legislation before focusing on changes to the political system to reduce the proliferation of parties.

At best, debate of the pension reform will get going for at least another month in the lower house of Congress, and could in theory be approved by the end of the year, Moura said.

A survey of the lower chamber completed last week by Arko Advice consultancy, however, found that 83 percent of the 201 lawmakers surveyed from 25 parties do not believe pension reform will be passed this year.

Meanwhile, Moura said the chamber will try on Tuesday to approve the government’s budget targets for next year and then vote on a new benchmark rate (TLP) for state development bank BNDES to reduce the subsidy it has offered for decades on long-term loans.

On Wednesday, the government hopes to see approval of a decree allowing companies to pay back taxes on favorable terms, a program known as Refis, Moura said. The decree has been changed by lawmakers, reducing government revenue to a fraction of the initial goal of 13 billion reais ($4.1 billion).

Next on the legislative agenda will be political reform to introduce a minimum performance threshold that will reduce the number of parties from 35 at present, Moura said.

This and other proposals to replace closed lists with a majority voting system and to restore corporate campaign funding banned two years ago are clearly aimed at helping the re-election of incumbents.

“Lawmakers are just thinking of themselves at this point,” Moura said.

$1 = 3.1568 reais Reporting by Anthony Boadle and Silvio Cascione; Editing by Paul Simao

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