Brazil Austerity Can Minimize Budget Cuts, Temer Tells Congress

Brazil Austerity Can Minimize Budget Cuts, Temer Tells Congress

by Mario Sergio Lima
7:14 PM BRT
May 4, 2015

Brazil’s government will have to make significant reductions to the spending budget if lawmakers block its austerity program, Vice President Michel Temer said.
“The budget cuts would be very radical,” Temer, a member of the ruling alliance’s Brazilian Democratic Movement Party, or PMDB, told reporters in Brasilia on Monday. “If we approve the adjustment, the budget cuts would be a lot smaller.”
The comments come after top lawmakers criticized the government’s belt-tightening strategy, including the leader of the Senate who also is a member of the PMDB. While the plan calls for cuts to pension and unemployment benefits that must pass through Congress, the government doesn’t need approval to freeze expenditures from this year’s budget.
Dilma Rousseff’s administration is struggling to boost revenue and save money to stave off the second sovereign-credit downgrade of her presidency. The measures have contributed to a surge in inflation as analysts expect the economy this year to contract the most in a quarter-century.
Senate President Renan Calheiros on April 30 said Rousseff’s policies would threaten jobs at a time when unemployment is rising. A day later he proposed a stimulus program that is designed to stimulate the labor market.