The price for the no-amendments commitment is high. The government agreed that state pensions over the R$2,400 (US$800) maximum will be cut by only 30%, rather than the 50% the government originally wanted.
Professor Luzinho, the deputy leader of the Partido dos Trabalhadores in the lower chamber, claimed that the deal meant that the work of the lower chamber was now finished. The professor, who represents São Paulo for the ruling PT, said that the reform was now in the hands of the senate. The pension reform is likely to come back to the lower chamber for a second vote, probably on Wednesday next week, after the senate has done its work.
The pressure for the change came from the right-of-centre parties, the Partido da Frente Liberal and the Partido da Social Democracia Brasileira. The PFL wanted the government to spell out that the heirs of people who died in service would be eligible for the pension up to the R$2,400 ceiling plus any extra, less 30%. The draft text sought to tie widows' and orphans' pensions to the amount that had been paid into the state scheme. The PSDB wanted guarantees for people who had worked for the state for a minimum of two years. Both parties agreed that in return for the concessions they would not make amendments next week.
Separately, the government has also shifted the battle over whether the bank transfer, or cheque tax (CPMF) should continue to the senate. The tax should expire in December. The government is also under pressure to give industry a boost by boosting capital allowances for new equipment. This issue, too, is likely to be sorted out by the senate.
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