Lula’s Advisers, Congress Seek Middle Ground in Spending Plan
- Economists eye fiscal anchor, politicians seek spending waiver
- House speaker prone to accept plan in exchange for re-election
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Advisers to President-elect Luiz Inacio Lula da Silva and members of Brazil’s congress are discussing a more moderate spending plan after last week’s budget proposal sent local markets plunging, according to two people with knowledge of the matter.
The plan will likely be put in front of Lula later this week after he walked back his own comments dismissing investors’ concern that a surge in government spending would undermine efforts to rein in inflation. While Lula’s economists are pushing for a fiscal stance that investors consider credible, his political advisers want to ensure they line up enough funds to pay for social programs without having to negotiate spending waivers with congress every year.