UPDATE 1-Brazil’s Rousseff battles to squash spending bills

Brazil’s Congress postponed for a third time voting on Tuesday on whether to overrule President Dilma Rousseff’s vetoes of two spending bills despite a cabinet reshuffle last week that was meant to bolster her support in the legislature.

For lack of a quorum, Congress put off until Wednesday considering the vetoes that are crucial for Rousseff’s effort to balance Brazil’s overdrawn fiscal accounts.

The bills she vetoed would raise public spending by 63 billion reais ($16.4 billion) over the next four years and include a hefty 78 percent increase in salaries of judiciary employees and a raise in payments for retirees.

Rousseff’s government has projected a 2016 primary budget deficit of 35.5 billion reais and is scrambling to plug that gap to avoid another debt downgrade following a decision by Standard & Poor’s last month to drop Brazil’s status to junk.

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