May 20, 2019 / 1:11 PM / 2 months ago

Brazil pension committee chief says government still well short of pension reform votes

BRASILIA (Reuters) - Brazil’s President Jair Bolsonaro on Monday emphasized the importance of pension reform to Brazil’s economic progress, but a powerful lawmaker said the president’s failure to engage with Congress means the bill is still well short of the votes needed for it to pass.

Brazil's President Jair Bolsonaro listens to Chief of Staff Minister Onyx Lorenzoni during a ceremony to presentation of the 2nd phase of the advertising campaign of the pension reform bill at the Planalto Palace in Brasilia, Brazil May 20, 2019. REUTERS/Adriano Machado

The comments to Reuters from Marcelo Ramos, chairman of the congressional committee on pension reform, underscored the growing doubt about the fate of the government’s flagship reform bill, which has slammed business and investor sentiment.

A regular central bank survey of economists on Monday showed that growth forecasts for this year have fallen to a new low. Markets slumped last week on reform concerns and the central bank said the economy probably contracted in the first quarter.

In a speech to businessmen in Rio de Janeiro on Monday, Bolsonaro blamed interest groups for impeding the advance of the reform process and said the country’s biggest problem was its political class.

But Ramos said Bolsonaro had not bothered to build support in Congress and his government was unable to form a majority to pass the bill, which the government says is critical to fixing public finances and reviving the economy.

Ramos told Reuters he estimates that pension reform has the support of no more than 200 votes in the lower chamber, well short of the 308 needed to pass. He said the country could not wait for the pension overhaul and Congress would push through reform on its own.

Earlier on Monday, Bolsonaro tweeted that pension reform is “the gateway to Brazil’s progress.” Congressional approval will pave the way for other proposals, like tax reform, that will be put to Congress as soon as it is passed, he said.

Bolsonaro was to join Economy Minister Paulo Guedes later on Monday to launch the second phase of a publicity campaign “New Social Security: You Can Ask” promoting the administration’s proposals to generate public savings of 1.237 trillion reais ($306 billion) over the next decade.

Also on Monday, Labor and Pensions Secretary Rogerio Marinho said he was confident the pension committee will “respect” the bill’s original text, but also noted strong “resistance” to some parts of it.

Marinho said the government is in constant dialogue with congressional caucuses, but denied reports of a compromise on proposals for new minimum retirement ages for teachers.

Fiscal transparency is critical to reviving the economy, Marinho said. Earlier on Monday the central bank’s weekly survey of around 100 financial institutions showed the median forecast for growth this year falling to a low of 1.24%.

That suggests the economy will barely grow more than the 1.1% registered in each of the prior two years, a surprisingly shallow upturn following the devastating recession of 2015-16.

Reporting by Jamie McGeever and Anthony Boadle; Editing by Chizu Nomiyama, Andrea Ricci and Dan Grebler

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