Lula and Lira discuss their relationship with a view to reforms and initial tests in the Chamber of Deputies.

(Reuters) – President Luiz Inácio Lula da Silva met with the Speaker of the House, Arthur Lira (PP-AL), to discuss the government's relationship with the deputies, focusing on the reform agenda that the Executive Branch wants to submit and approve in Congress this year, according to sources familiar with the matter who spoke to Reuters.

Lira attended a dinner with Lula at the home of the licensed federal deputy and current Minister of the Secretariat of Social Communication, Paulo Pimenta (PT-RS), in Brasília on Thursday.

The meeting between the two occurred days after the Speaker of the House said at a public event that the government still does not have a consistent base "to face matters requiring a simple majority" and, therefore, also does not have the support at the moment to approve the tax reform, considered vital – along with the so-called fiscal anchor to replace the spending cap – for Lula's third term.

Lira openly stated that the government alone does not have the endorsement of at least 308 of the 513 federal deputies, the minimum required to approve constitutional amendments. Lira's support – re-elected for another two years as Speaker of the House with a record vote of over 400 – would be crucial for advancing these Executive priorities in the House, not to mention providing greater peace of mind for endorsing a series of Provisional Measures awaiting a vote.

Lula and Lira did not make public statements after Thursday's dinner, but a prominent Workers' Party congressman with connections to the Speaker of the House said, privately, that Lira is in good faith with the new government and did not see his remarks as a threat, but rather as a warning to the new administration.

He also stated that Lira has been strengthening relations with the government through the Minister of Institutional Relations, Alexandre Padilha, and with the government leader in the Chamber of Deputies, José Guimarães (PT-CE).

This source added that Lira does not want to be caught off guard by government actions in Congress and is willing to act in a coordinated manner.

Another source from the Chamber of Deputies reported that Lula had invited the Speaker of the House to accompany him on the official visit to China. When contacted, Lira's press office did not comment on the matter.

The Speaker of the House, who in the last election publicly defended and supported the reelection of then-President Jair Bolsonaro, was the first public authority to acknowledge Lula's victory in the second round. After a term of extreme power with expanded control over the budget due to the increased use of the so-called secret budget (rapporteur amendments), Lira is now calibrating his firepower with the new administration and the new design of the mechanism that allocates funds.

Congressman Reginaldo Lopes (PT-MG) told Reuters that the meeting between Lula and Lira at the dinner served to adjust the relationship and build the necessary convergences to approve the government's reform agenda in the Chamber, notably the tax reform and the fiscal anchor.

Lopes did not participate in the meeting, but he has a good relationship with Lira, and was chosen as the coordinator of the Chamber's working group on tax reform.

Lopes stated that he believes both reforms will be approved. "The tax reform proposal is as much a priority for Lira as it is for Lula," he emphasized.

The lawmaker expects the reform text to be presented on May 16, which would allow for discussion and subsequent voting on the initiative in plenary session.

In turn, the government is expected to submit the proposal for a new fiscal anchor this month, thus bringing forward by a few months the previous expectation of sending the text by August of this year.