Brazil lower house pension vote in question as session goes late

Brazil’s lower house of Congress was due to vote on Tuesday on a flagship overhaul to the pension system but by early evening the debate had still not begun, calling into question whether the government had the votes it needs.

The lower house speaker, Rodrigo Maia, determines when a vote occurs but will only proceed when he is confident he has support from the house, which is comprised of representatives of more than 20 political parties.

The vote is a test of support for President Jair Bolsonaro, who has made it his key economic policy and is banking on the reform to bring the country’s public finances back to health.

His economy ministry says Brazil’s economic growth and inflation prospects for years to come rest on closing the massive budget gap created by the country’s generous pension system.

Joice Hasselmann, the government’s leader in Congress, told reporters it was possible the vote could be delayed until Wednesday. The bill additionally is expected to face obstruction from opposition parties, she said.

“Even with obstruction, we will overcome the obstruction and vote, no problem,” Hasselmann said.

Earlier in the day, Bolsonaro and Maia both said they were confident the bill would pass two rounds of lower house voting this week before Congress breaks for recess on July 18.

The vote was expected to be tight as it requires a three-fifths majority, or 308 of the 513 members of the lower house, to make the constitutional changes the bill demands. Presidential Chief of Staff Onyx Lorenzoni said on Sunday that the government estimated it could count on around 330 votes.

But a poll of lawmakers published on Tuesday by newspaper O Estado de S.Paulo found that 268 members of the lower house supported the bill, the highest number yet but still 40 votes short of what is needed.

The newspaper said 105 lawmakers opposed the changes, 72 did not respond, 42 could not be contacted and 23 were undecided.

If the pension bill passes in the lower house, it will move to the Senate after the congressional recess from July 18 to 31. Credit Suisse analysts expected it to be approved there with little risk of being watered down by amendments.

Brazilian markets have rallied in recent days on rising expectations that the pension bill could pass. The benchmark Bovespa index hit a record high on Monday, rising 3.5% this month; it is up nearly 19% year to date.

The country’s markets were closed on Tuesday for a public holiday in Sao Paulo.