BRASILIA, (Reuters) – A measure that reduces the cost of social welfare benefits narrowly cleared the lower chamber of Brazil’s Congress last night in a tense victory for President Dilma Rousseff’s efforts to cut a fiscal deficit and restore investor confidence.
Lawmakers voted 252-227 to pass the bill that toughens conditions for jobless Brazilians to gain access to welfare and unemployment insurance, legislation that has put Rousseff at odds with Brazil’s largest labor union and some members of her Workers’ Party.
The belt tightening comes at a critical moment for Rousseff, who has lost popularity as Latin America’s largest economy drifts into recession and a graft scandal engulfs state-run oil company Petrobras.
Workers’ Party whips convinced reluctant members ultimately to vote for the bill, one of several spending cuts proposed by Finance Minister Joaquim Levy to close a budget gap. The bill now awaits approval by the Senate, where it could face hurdles.
Levy has sought to increase government revenues and cut expenditures to reach a fiscal savings goal of 1.2 percent of gross domestic product this year, up from a 0.63 percent deficit in 2014. Brazil risks losing its prized investment-grade credit rating if it fails to put its finances in order.
