BRASILIA: President Dilma Rousseff won a hard-fought victory in Brazil's Congress early on Thursday with the passage of legislation that frees her administration from complying with its fiscal savings goal for this year.
The amendment to the budget law, approved in a heated 17-hour joint session of Congress, allows her government to deduct infrastructure investments and tax breaks to lower the primary surplus goal to one tenth of its original level.
Since narrowly winning re-election in October, Rousseff has vowed more fiscal discipline and picked a fiscal hawk as her next finance minister to regain the trust of investors and avert a credit rating downgrade.
Her government continues to send mixed signals, however. On Wednesday, it approved a 30 billion reais ($11.7 billion) loan to state development bank BNDES, a transfer that has been widely criticized in the past for increasing Brazil's debt burden.
Fiscal accounts have deteriorated on Rousseff's watch to the point where Brazil risks ending 2014 with its first annual primary deficit in two decades.
Rousseff's opponents accused her allies in Congress of throwing fiscal discipline out of the window and handing the president a blank check to spend recklessly.
Approval of the amendment took two weeks due to obstruction tactics by opposition parties and lukewarm support from within Rousseff's coalition.
Rousseff secured the votes of her allies by decreeing a 444 million reais increase in funds for pork barrel projects that depended on passage of the budget goal amendment.
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