Key Brazil senator pushing to waive at least $19 billion from spending cap

BRASILIA (Reuters) -Brazilian Senator Marcelo Castro said on Wednesday that a constitutional amendment backed by President-elect Luiz Inacio Lula da Silva must exempt at least 100 billion reais ($19 billion) from a constitutional spending cap next year.

In an interview with Reuters, Castro, the key lawmaker handling 2023 budget talks, said the initial idea of permanently excluding the “Bolsa Familia” welfare program from the spending ceiling had “lost a lot of strength.”

The discussions are now for a waiver of one or four years, he added.

The senator also said he was against including in the bill a commitment to a new fiscal framework, as suggested by some in Lula’s Workers Party.

Castro said that would represent “another problem for people to understand, discuss, criticize”.

Lula’s transition team first proposed to remove the Bolsa Familia program from the spending cap indefinitely, opening space for 175 billion reais in new spending.

The initial proposal also removed some public investments from the cap, opening room for another 23 billion reais in public spending next year.

($1 = 5.3907 reais)

(Reporting by Ricardo Brito and Bernardo Caram; Writing by Marcela Ayres; Editing by David Gregorio)