February 1, 2018 / 2:49 PM / 6 months ago

Brazil pension reform lacks votes in lukewarm Congress

RIO DE JANEIRO (Reuters) - The overhaul of Brazil’s social security system to reduce its burden on the government’s overdrawn accounts still does not have enough support for Congressional approval, the cabinet minister in charge of political affairs said on Thursday.

Brazil's President Michel Temer reacts during an opening session of the Year of the Judiciary, at the Supreme Court in Brasilia, Brazil February 1, 2018. REUTERS/Ueslei Marcelino

The pension reform bill is the cornerstone of President Michel Temer’s efforts to reduce Brazil’s budget deficit and is due to be put to a first vote in the lower house in the week of Feb. 19.

But Temer does not have the votes and many lawmakers in his coalition are reluctant to be seen backing an unpopular austerity measure ahead of the October general elections.

Speaking to business executives in Rio, Minister Carlos Marun said that “many” lawmakers are undecided about voting for the pension bill, which has to be approved twice in each of the chambers by a three-fifths super majority. In the lower house, that requires at least 308 votes of the 513 members.

On Tuesday, Marun told reporters that the government had “close to 270 votes guaranteed” and was working around the clock to convince more lawmakers to back the bill.

Marun said the government was open to suggestions on how to “improve” a bill that has already been diluted to make it more palatable to Congress, reducing its impact on fiscal savings.

A document obtained by Reuters this week indicated that the government is working on 88 uncommitted Congressmen and has asked businessmen to help convince the wavering lawmakers on the need to pass the bill to recover the country’s credit ratings.

A poll published on Wednesday showing how unpopular Temer is will not help win over politicians in an election year. The survey by pollster Datafolha said 70 percent of Brazilians view his government as bad or terrible.

Temer held off putting the bill to a vote in December for lack of support, delaying it until after the Christmas-to-Carnival Congressional recess that ends next week.

The delay increased market skepticism over Brazil’s ability to rein in a deficit that caused the loss of its investment grade credit rating.

Reporting by Maria Clara Pestre, Iuri Dantas and Maria Carolina Marcello; Writing by Anthony Boadle; Editing by Chizu Nomiyama and Susan Thomas

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