The PMDB, for instance, is the largest party in the coalition, yet is still not represented in the cabinet, and it took a personal appeal from its leader in the lower chamber, congressman Eunício Oliveira (PMDB, Ceará), to convince some of its legislators to vote for the bill. The liberal party (PL) of Vice-President José Alencar, though it has cabinet representation, is distinctly displeased that it holds no ministry in the area of the economy, such as finance, trade & industry or agriculture.
Expect to see Lula move to counter such dissatisfaction soon, possibly with the creation of a `political council' on which all the parties in the coalition will be represented, giving everybody the feeling that they are participating in the formulation of government policy.
In the ranks of the opposition, the conservative PFL was dead set against any taxation for retired civil servants, and looked set to scupper that clause in voting towards the end of the week. The government recognised it needed to adopt a more flexible stance elsewhere in the bill, therefore, and dropped plans for a lower ceiling on state judges' salaries.
With pension reform underway, the government has a new hill to climb, in the form of the second major reform left outstanding by Cardoso: taxation. If pensions put it at odds with the labour movement generally, civil servants in particular and, most visibly, with the judiciary, then tax reform promises to throw up a whole new set of opponents, critics and lobbies.
The business community is lobbying for simplification, and against any increase in the overall tax burden. The real bugbear, however, promises to be state governors. `The government's beef over pension reform is with the judges and civil servants. Over tax reform, it'll be with the governors,' predicts Aécio Neves, himself governor of the state of Minas Gerais.
Governors agreed to support the government's original proposal for pension reform before it went to congress, only to see legislators shoot holes through a number of ceilings it imposed, including ones that affect them directly, such as the one on state judges' pensions. They intend to make no such mistake with regard to tax reform. Their strategy this time around is to cut deals directly with the legislators, enlisting the president only in as much as he gives his support to proposals they put forward for changes in taxation.
Among the proposals that unify all the governors are: an increase in the amount refunded to the governments of states that contribute heavily to Brazil's exports; and 25% of fuel tax, as well as part of the so-called `cheque tax' on financial transactions (CPMF), going to the state governments. Beyond that, there are region-specific proposals on which, of course, they are divided.
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