Bolsonaro and the half-baked Social Security reform

By Helena Chagas, in The Divergent and for the Journalists for Democracy - There are two convictions in the political world in Brasília today: 1) by the end of the year, Congress will have approved a pension reform; 2) the reform project sent to the Legislature by the Executive Branch will be significantly altered. Between these two certainties, there is an infinite number of possibilities, and today the preferred game of economic agents and other interested parties is to bet on the size of the reform that will be approved.

Never before has there been such weak coordination surrounding a proposed constitutional amendment considered a priority by the Executive branch. Ignoring reasons ranging from the chronic political confusion of the forces elected last year to President Jair Bolsonaro's personal disinterest in the subject, what is predicted today is that the mega-reform of R$ 1 trillion proposed by Paulo Guedes will be much smaller.

At best, it could end up being reduced to something along the lines of what Michel Temer proposed (savings of around R$ 700 million), or even end up in a "pocket" version, a vulgar half-measure. Will that be enough?

It depends. When strictly speaking about the accounts, some observers assure that even a minor and not-so-deep reform could provide fiscal relief to get through Bolsonaro's four-year term without going bankrupt. Another reform would have to be done by the next president – ​​and this is no different from what has been done throughout the last presidential terms. Since Fernando Henrique Cardoso, each one, including Lula and Dilma, has been making their own little reforms – even imperfect ones, all of them made some progress.

(Learn about and support the project) Journalists for Democracy)

The market may not be happy with a half-hearted reform, and will cling to the narrative that something like that won't excite investors in the same way that a major, comprehensive reform like Guedes's would. Depending on the degree of watering down, the Minister of Economy himself may become so dissatisfied that he throws in the towel and goes home – thus exacerbating a process of instability in the economy that could have serious political impact.

It is unlikely, however, that at this point – when it has already been established that Guedes's project will not pass as it stands – the pension reform will become a matter of political life or death for the Bolsonaro government. Complete success in the voting on the original constitutional amendment, a very remote possibility today, could even represent investments, economic recovery and, at the end of four years, re-election.

Half-measures won't sink the government. But, along with the other temperature and pressure conditions it has produced, such as the enormous difficulty of simply managing and running things, it won't help to create a political scenario favorable to Bolsonaro in 2022 either.

(Learn about and support the project) Journalists for Democracy)