The new Congress was always going to be awkward for Brazil’s president. Having won re-election last October with the slimmest of majorities, Dilma Rousseff has a weak mandate. She faces power cuts, water shortages and a probable recession. She must curb the growing fiscal deficit to maintain Brazil’s prized investment-grade credit rating.
On top of all this she must contend with a far-reaching corruption scandal at Petrobras, the state-controlled oil giant. Its embattled boss, Maria das Graças Foster, an ally of the president, has resigned along with five other executives (see article).
Ms Rousseff has now been given a first taste of just how obstructive Congress is likely to be. On February 1st, against her wishes, the lower house elected Eduardo Cunha of the Party of the Brazilian Democratic Movement (PMDB) to be its Speaker.
On paper, Mr Cunha is an ally of her Workers’ Party (PT). Her vice-president, Michel Temer, is the PMDB’s national boss. The party has filled six of 39 ministries in the new administration. But as an independent-minded congressman, the new Speaker has been an irritant to the president throughout her first term. “Most government defeats have his fingerprints,” says João Castro Neves of Eurasia Group, a consultancy. Mr Cunha backed her centre-right challenger in last year’s election.
His backroom wiles and intimate knowledge of the congressional rule book prompt Brazilian fans of “House of Cards”, an American television drama about Washington politics, to compare him to the show’s ruthless protagonist, Frank Underwood. As Speaker, Mr Cunha can sit on bills he does not support or spur on those congressmen like. A federal deputy for Rio de Janeiro since 2003, he has become a champion of backbenchers.
This helps explain his lopsided margin of victory—and the scale of Ms Rousseff’s defeat. From the start Mr Cunha was favoured to beat Arlindo Chinaglia, the bumbling candidate of the president’s PT, and Júlio Delgado of the opposition Brazilian Socialist Party. That Mr Cunha managed to pull it off in the first round, with almost double the number of votes that went to Mr Chinaglia, took everyone by surprise. Worse, in a vain last-ditch attempt to sway congressmen to its side, the PT relinquished other leadership positions in the Chamber of Deputies and control of the choicest commissions.
This is a setback for Ms Rousseff’s planned legislation, which she outlined in a message to Congress on February 2nd. It includes auctioning off infrastructure projects to the private sector, streamlining environmental licensing, boosting private-sector credit and building 3m cheap homes. The results of the race for Speaker suggest that the government’s core of support is well below half of the 513 seats in the Chamber of Deputies, notes Thomaz Favaro of Control Risks, another consultancy.
The toughest fight will be over the reform of entitlements, such as pensions, in order to put public finances on a surer footing. “Congress will charge a high toll for every single measure that passes through it,” worries Marcos Lisboa of Insper, a business school. Mr Cunha has already pledged to put to a vote a constitutional amendment that would stop the government from pruning extra spending mandated by Congress through earmarks. It could remove the president’s discretion over 8 billion reais ($2.9 billion) in annual spending. That would make it harder for the government to hit its target of a primary surplus (before interest payments) of 66 billion reais, or 1.2% of GDP, in 2015.
An uppity Congress will also give Ms Rousseff more grief over Petrobras. The opposition is clamouring for a third congressional probe into the affair. Mr Cunha seems willing, but he has ruled out moves to impeach Ms Rousseff, who is so far personally untainted by the scandal.
In the wake of its congressional rout, the Planalto, as the presidential palace is known, has launched a charm offensive. The president congratulated the newly elected Speaker. Pepe Vargas, the minister in charge of relations with other branches of government, joked that even after a nasty football game “friends sit down and drink beer”. Ms Rousseff can, in exchange for support from congressmen, distribute cushy jobs in ministries and at a handful of big state-controlled firms (though not Petrobras, where Ms Foster’s replacement is likely to be a seasoned manager).
Mr Cunha is not a dogmatic oppositionist—and says he is open to persuasion. But, as he vowed after his election, Congress on his watch will be intent on exerting its independence, “whether it is to the Planalto’s liking or not”.
Fonte: The Economist Online – 05/02/2015