Brazil’s Supreme Court Rules That Bolsonaro-Era ‘Secret Budget’ Unconstitutional In Win For Lula’s Administration

In a major win to Brazil’s President-elect Luiz Inácio Lula da Silva, the Bolsonaro-era ‘secret budget’ initiative was ruled unconstitutional by the country’s Supreme Court on Monday while the court allowed Lula to increase a social investment program for the poor.

The ‘secret budget’ mechanism, which gave Congress funds with very little oversight in exchange for supporting the government’s initiatives, was ruled by the Supreme Court unconstitutional through a 6-5 vote, according to the Foreign Times.

The program had lacked transparency from the onset, with many saying that it was largely used by outgoing President Jair Bolsonaro as a way to increase support for his administration in Congress at the cost of over a quarter of the nation’s discretionary federal budget.

The ruling against the “secret budget” program is a major blow against lower House leader Arthur Lira and Senate President Rodrigo Pacheco, as it limits their ability to meddle against Lula’s initiatives by controlling lawmakers through the money dispersed from the program.

It also frees up money that could potentially be spent on Brazil’s social welfare programs, something which Lula has been pushing for significantly since his election.

The Supreme Court also ended up voting to remove the cap for Brazil’s social investment and spending program, allowing Lula to fulfill a campaign promise to increase the budget on social welfare programs in the country focused on helping the poor, Reuters reported.

The injunction comes as a surprise, as Lula’s team has been pushing for a separate bill that would have allowed them to raise the spending cap by at least $19 billion as a way of boosting the country’s social welfare programs. It was already able to pass the Senate and is now only awaiting a vote from the lower House.

“Taking back control of the budget and the guarantee that Bolsa Família [benefits program] will not be subject to the spending ceiling . . . are important assets for the elected government,” political analyst Rebeca Lucena said.

“It's important for the country to bet on good politics, on negotiation, on institutionality, and for us to give strength to the economic policy that ... will appease the market's mood and show that Brazil will be on track from Jan. 1,” incoming Finance Minister Fernando Haddad said.