The false crisis of social security.

Social security is a right and, according to the provisions of the federal constitution, must be organized as a general, contributory, and mandatory membership system, observing criteria that preserve financial and actuarial balance.

Well, in 2017 the Temer government announced a deficit of 151,9 billion reais in the accounts of the General Social Security System, which would be the largest since 1995, and presented a proposal to reform the social security system.

If such a deficit of 150 billion is true, it is very difficult, a priori, to deny the relevance of pension reform, but the proposed pension reform has sparked irrational, propagandistic, but unsubstantive debate.

Since 2017, the government has changed, but not the desire for pension reform. And now, a proposal for a New Pension System has emerged.

It states that the actuarial rules for accessing benefits, in addition to being rigid, do not meet the constitutional principles of equality and income distribution, insofar as Brazil – according to the OECD – remains one of the most unequal countries in the world.

Well, on one side there are the people from the Presidential Palace, the mainstream media with their experts passionately describing the urgent need for social security reform, and on the other, no less passionate, are those who see the reform as just another move implementing a cruel liberal agenda capable of dismantling social rights and achievements, all to serve the interests of the market, especially the banks.

Who is right? I don't know, but it's undeniable that there's a lack of information and, consequently, a lack of debate.

Professor Denise Lobato Gentil, in her thesis: “Fiscal Policy and the False Crisis of Brazilian Social Security – Financial Analysis of the Period 1990–2005,” submitted to the Faculty of the Institute of Economics (IE) – Center for Legal and Economic Sciences (CCJE) of the Federal University of Rio de Janeiro (UFRJ), states that “Given this avalanche of gloomy assessments disseminated by the media, it's no wonder that ordinary people, politicians, and even respectable figures in academia believe that pension reform is urgently needed to solve a very serious financial problem. The deficit, however, does not exist.. ”.

O Dieese He described Temer's proposal as absurd, stating at the time that it was part of a process of dismantling the social security system and that 70% of the population would be left out of the social security system.

Academics, such as Professor Rosa Maria Marques from PUC-SP, stated at the time that the reform disregards the specific needs of workers and does not alter the financing model of the system; that there was a clear preference for working with the flow of expenses, even though it proposes ending the exemption from contributions on exported products, which should increase revenue. Considering that the so-called "deficit" in Social Security deserves further study, since the figures presented consider Social Security itself, that is, its revenues and expenses, but Social Security is part of Social Welfare, which is supposed to be in surplus.

For all these reasons, the topic deserves rational reflection.

The Constitution provides for a tripartite model for financing the sector, according to which the State, employers and workers contribute in equal parts.

And, taking into account the tripartite model, all those who defend it believe that the reform – in its proposed form – would be mistaken regarding the deficit, according to the National Association of Tax Auditors – ANFIP.

ANFIP analyzed the alleged deficit of 80 billion reais reported by the government in 2015, which, according to the association's researchers, could have been covered by part of the 202 billion reais collected by COFINS, the 61 billion reais collected by CSLL, and the 53 billion reais collected by PIS-Pasep. There would also be another 63 billion reais captured from Social Security through the Union Revenue Disconnection Mechanism (DRU) and a further 157 billion reais from tax breaks and revenue waivers.

In other words, there has been incompetence in management for at least three decades.

In other words: the deficit would not actually exist. It stems from a matter of convenience: since 1989, the government's share has not been accounted for as a source of revenue for Social Security, meaning the Union denies that Social Security is part of the Social Welfare system, an offense against articles 194 and 195 of the Constitution.

And in this context, it cannot be forgotten that the topic of retirement is contained in Title VIII of our Constitution, which deals with "The Social Order".

In Chapter I of Title VIII, there is Article 193. It stipulates that the social order is based on the primacy of labor and aims for social well-being and justice. And, in the same "Title VIII," there is Chapter II, which deals with Social Security; that is, financial and actuarial balance cannot disregard social well-being and justice.

Social security is financed by the whole of society, directly and indirectly, as provided by law, through resources from the budgets of the Union, the States, the Federal District and the Municipalities. The Social Security systems are: (a) general, which is intended for private individuals, such as the INSS system; (b) specific, such as that of public servants; (c) supplementary, which aim to complement the general system or that of public servants.

The truth is that Social Security (an integrated set of actions aimed at ensuring rights related to health, social security, and social assistance) is funded through social contributions, in a tripartite system.

Funding sources are the economic and financial means obtained and allocated to the granting and maintenance of Social Security benefits. There are direct funding sources foreseen for the System, which are collected from workers, employers, and the State through contributions (PIS, COFINS, CSLL), and there are indirect sources, through taxes, which are used to address financial shortfalls in the system and are paid by the entire society.

Is it possible to find the financial and actuarial balance of the system without compromising social well-being and justice? This is the challenge and the duty of those who respect the country's political charter. And for this reason, perhaps before any reform, society deserves a transparent and honest debate on the subject, broadcast on television and online during prime time. Without debate and broad public participation, there is no democracy.

Well, Denise Lobato Gentil, in a study where she conducted a financial analysis of Social Security for the period 1990-2005, using as a reference point the provisions of the 1988 Federal Constitution and statistical data on the execution of the federal government's budget, concluded that the social security system is financially self-sustaining, being able to generate a large surplus of resources.

However, a significant portion of its revenue is diverted to investments in other areas within the fiscal budget, allowing primary surplus targets to be met and even exceeded.

Therefore, contrary to what is commonly believed, the social security system is not in crisis, nor does it need reforms aimed at fiscal adjustment, as the system has surplus resources. Instead, it needs reforms that allow for the inclusion of a large segment of the population that is currently unprotected. The system's future sustainability will depend, however, on changes in economic policy that promote growth coupled with income distribution policies.

What is in crisis is the loyalty of various governments, both current and past, to tell the truth and propose, guided by truth, a democratic debate about what to do and how to do it, given future risks and their inability to manage the public interest responsibly.

I raise these doubts and provocations for debate. Perhaps before voting on such a delicate topic, the provisions of article 37, item XI, which establishes that the remuneration and subsidies of public servants cannot be...exceed the monthly allowance"The salaries of the ministers of the Supreme Federal Court are capped at the same level. In municipalities, the salary cannot exceed that of the mayor. In states and the Federal District, the ceiling is the salary of the governor, in the case of the Executive Branch, and the judges of the Court of Justice, in the case of the Judiciary. The constitutional text does not mention any exceptions to the rule."

And, to leave no doubt that the intention is to cut any subsidy that exceeds the limits of the constitutional ceiling, the Constitution adds in article 17 of the Transitional Constitutional Provisions: “Salaries, remuneration, benefits, and allowances, as well as retirement benefits that are being received in violation of the Constitution, will be immediately reduced to the limits established therein. In this case, no claim of acquired rights or receipt of excess payments under any title will be admitted.".

And, they say, the extra pay for the Federal Judiciary alone would exceed 12 billion reais per year, or 120 billion in ten years, and there is research showing that in the State Courts of Justice, 73% of magistrates receive amounts above the constitutional ceiling, an amount that would exceed 20 billion reais in ten years, not to mention the labor courts, senate, chamber of deputies, legislative assemblies, city councils, federal prosecutor's office, labor prosecutor's office, and state prosecutor's office.

In other words, for the concern with fiscal balance to gain my support, it must confront privileges disguised as acquired rights.