Temer's agenda of dismantling the welfare state.

On May 24th, interim president Michel Temer announced six economic policy measures, touting the purpose of reducing debt and resuming growth. These measures drastically break with the social welfare model that is the backbone of the 1988 Constitution. In fact, they constitute a blow against the Brazilian people, as they were not submitted to an electoral debate. The project approved by 54,4 million Brazilians in 2014 is diametrically opposed to what the Temer government wants to impose on Brazilian society.

Temer announced the control of primary expenses; the payment of 100 billion reais by BNDES to the National Treasury; the extinction of the Sovereign Fund; the establishment of rules restricting pension funds; restrictions on the granting of new subsidies; and the end of the profit-sharing regime in the pre-salt oil fields. These are restrictive measures on public spending, with anti-national content and a direct negative impact on the lives of the majority of the Brazilian population.

Here, I will comment on the first one, which cuts the budgetary support for the provision of public services to the most needy population. More than that, in practice, it alters the nature of the State, directing it in the opposite direction to that attributed by the Citizen Constitution of 1988: a State dedicated to a modern and democratic republican society, committed to the provision of public services of social interest and universal coverage.

Under the guise of necessary fiscal adjustment, the government is communicating to the market, in a coded way so that the population does not understand, its commitment to dismantling the welfare state currently under construction in the country.

Restricting primary spending as a permanent rule of the federal government's fiscal policy simultaneously reduces spending on currently provided public services, ongoing investment in expanding the physical network of municipalities, states, and the federal government itself, and ultimately buries the possibility of universalizing these services in the near future, as had been planned.

In attempting to limit the expansion of primary public sector spending, Temer wants to eliminate the current rules for minimum spending on health and education. Constitutional Amendment No. 86/2015 stipulates that the Union will allocate 13,2% of its net current revenue to health in 2016, and subsequently increase this percentage to reach 15% of net current revenue in 2020. Complementary Law No. 141/2012, observing the terms defined in Article 198 of the 1988 Federal Constitution, determines that states and municipalities will allocate, respectively, at least 12% and 15% of their tax revenue to health. In the area of ​​education, Article 12 of the Constitution stipulates that the Union will allocate annually no less than 18%, and the states, the Federal District, and the municipalities at least 25%, of their tax revenue.

It is worth highlighting that the change Temer wants to make does not limit the expansion of total public spending; in other words, the financial component remains unlimited. Therefore, there will be no restrictions on the federal government's financial expenses, such as the payment of public debt.

Thus, expenses stemming from monetary policy, more specifically those destined for the payment of interest and principal on the debt, as well as expenses associated with the carrying cost of international reserves and currency swap operations (a protection service for companies based in Brazil and indebted in dollars), remain unlimited; in other words, expenses of interest to large capitalists. Temer knows that these were the expenses that experienced the most significant growth during the current economic crisis. These are his class commitments.

Applying Temer's proposal to restrict primary spending, in the event of a positive variation in the gross domestic product, there will be a reducing effect on the federal government's primary expenditure as a proportion of GDP. In economic terms, this will mean a reduction in the State's share of aggregate demand in the economy. This means a reduction in the share of wealth generated by the Brazilian economy allocated by the federal government, that is, a reduction in the budget allocated to the payment of public services. The reduction will also be observed in terms of expenditure per capita, with repercussions in terms of the quantity and quality of services provided to the population.

This proposal, in the form of a Proposed Amendment to the Constitution (PEC), already dubbed by some as the "Temer rule," will imply the "constitutionalization of the State's lack of commitment" to universal access to health and education services. Michel Temer claims that this rule increases the predictability of macroeconomic policy, strengthens confidence, reduces country risk, opens space for a structural reduction in interest rates, and in emergency situations will allow the State to alter its composition. He just doesn't say that the people who most need health and education will "pay the price."

All coups begin with the removal of the president elected by popular vote. In all of them, the second act is the destruction of public policies democratically chosen by the people. Temer's economic policy agenda is the coup's agenda: the dismantling of the welfare state.