Brazil lower house set to vote on Bolsonaro's flagship pension bill

BRASILIA: Brazil's lower house of Congress was due to vote on a flagship overhaul to the pension system on Tuesday, in a test of support for President Jair Bolsonaro, who is banking on the reform to bring the country's public finances back to health.

Bolsonaro has made it his key economic policy. His economy ministry says Brazil's economic growth and inflation prospects for years to come rest on closing the massive budget gap created by the country's generous pension system.

Presidential Chief of Staff Onyx Lorenzoni said late on Monday that the government aimed to put the main bill to a vote on Tuesday and for the opposition to present amendments on Thursday.

The vote is expected to be tight as it requires a three-fifths majority, or 308 of the 513 members of the lower house, to make the constitutional changes the bill demands.

A poll of lawmakers published on Tuesday by newspaper O Estado de S.Paulo found that 268 members of the lower house supported the bill, the highest number yet but still 40 votes short of what is needed.

The newspaper said that 105 lawmakers opposed the changes, 72 did not respond, 42 could not be contacted and 23 were undecided.

In a move only made when tight votes are expected, Bolsonaro will temporarily free ministers who also hold seats in Congress to attend the vote.

He has already signed off on the temporary measure for his chief of staff and tourism minister and is expected to liberate the agriculture minister later today.

If the pension bill passes in the lower house, it will move to the Senate after the congressional recess from July 18 to 31. Credit Suisse analysts expect it to be approved there with little risk of being watered down by amendments.

Brazilian markets have rallied in recent days amid rising expectations that the pension bill could pass. The benchmark Bovespa index hit a record high on Monday, rising 3.5% this month; it is up nearly 19% year to date.

In overhauling pensions, Bolsonaro is attempting what several past presidents have failed to achieve. But his refusal to engage in the usual political horse-trading of Brazilian politics - instead remaining aloof from direct dealings with Congress on the issue - had angered many lawmakers and increased the difficulty of obtaining sufficient support for the legislation.

Bolsonaro's standing in public opinion polls has declined as his government has been rocked by a series of scandals, including corruption allegations against his son and several other spats resulting in the resignation of ministers.

More than half of Brazilians do not have confidence in Bolsonaro as president, according to a poll last month.

The pension overhaul itself remains divisive, although a poll released earlier Tuesday showed that 47% of Brazilians support the bill and 44% are against, the first time more have backed it than opposed it.