In addition to the first round of their presidential election, Brazilians decided on Sunday who will control their federal legislature beginning January 1, 2019. All 513 seats in the lower Chamber of Deputies and 54 of 81 Senate seats were up for grabs, and voters opted for one of the most dramatic change elections in history. Only eight senators were re-elected and more than half of the deputies will be first-timers. The traditional center-right ruling parties were smashed while Jair Bolsonaro’s right-wing Social Liberty party jumped from one to 52 seats. Come January, a very conservative Congress will be moving even further to the right.
Before those members are seated, though, comes the lame-duck session. In Brazil, presidents traditionally use this period to “clear the docket” — push through frequently controversial and unpopular measures so that the new Congress will not have to deal with them in January. Michel Temer, who came to power in 2016 when these same legislators voted to impeach President Dilma Rousseff, has made clear he hopes to do just that.
“Those who were not re-elected raffle off their mandates in exchange for some material benefit. That allows for votes on matters that would seem almost crazy at other times.”
Temer’s agenda for the lame-duck session includes a bid to privatize some of the country’s power authorities, overhaul social security, loosen up restrictions on pesticides, allow Congress to decertify Indigenous lands, as well as revising a handful of other regulations and shifting the allotment of federal powers that the administration has stalled on in the past.
Using the lame-duck session as way to ram through unpopular agenda items is nothing new in Brazil. “Those who were not re-elected raffle off their mandates in exchange for some material benefit,” said Leandro Gabiati, a political scientist at the University of Buenos Aires. “That allows for votes on matters that would seem almost crazy at other times.”
At the end of Rousseff’s first presidential term in December 2014, Congress approved a fiscal maneuver that permitted the government to use some creative accounting to close its books and let Rousseff off the hook for any potential “crime of responsibility.” In exchange, each legislator received $289,000 in pork-barrel spending to distribute among their constituencies. (In the end, Brazil slumped into its worst recession since the early 1980s — perhaps ever — and Rousseff’s opponents used this measure as justification to impeach her in 2016.)
In more less partisan times, clearing the slate could been seen as a “good faith agreement” to allow the new president and Congress to assume office without having to deal with baggage leftover from the previous administration. However, Temer is the most detested Brazilian leader in history and widely viewed as illegitimate. His current approval rating is down to 5 percent, and Congress has a similarly abysmal 3 percent high-confidence rating. Together, with the media and the country distracted, they want to push through many of the same unpopular proposals that they’ve tried and failed to pass over the last two-and-a-half years, due to popular rejection.
Eunício Oliveira of Temer’s Brazilian Democratic Movement party and Rodrigo Maia of the right-wing Democrats party, respectively the presidents of the Senate and the Chamber of Deputies, have so far avoided publishing full legislative agendas for the coming weeks. With a backlog of bills — the legislature has essentially been on standby since the World Cup in June — the recent legislative docket, however, offers some clues. A handful of bills in Congress were scheduled by parties on the right in recent months, but postponed out of fear that they could be costly on election day. What follows is a list of likely items to come up for debate.
Privatization of Eletrobras Distributors
On Tuesday, its first day back in session, the Senate will discuss a bill that would regulate the sale of six state-controlled energy distribution companies in the northern states of Acre, Rondônia, Roraima (already went to auction in August), Alagoas (suspended by a judicial order), Piauí (sold in July) and Amazonas. The lower house already approved the text of the bill in July and is unlikely to find much resistance in the Senate.
Temer, for his part, has long claimed that the regional power distributors cost Brazil money, but various plans to privatize the companies have stalled in the judiciary. Supreme Court Minister Ricardo Lewandowski suspended the sale of one of the distributors and ruled that the government should be prevented from fully privatizing mixed-ownership companies without the approval of the legislature. The public case for selling the distributors might also stumble, as the national energy authority is turning healthy profits: In August, Eletrobras reported $732.5 million in second-quarter profits, more than doubling the profits compared to the same period the previous year.
Social Security Reform
Proposed overhauls of social security, one of Temer’s principal issues since taking office, were lauded in the financial press. But the measures repeatedly stalled in Congress due to their overwhelming unpopularity among the public. Still, the president wants to build a consensus to carry out this major economic change as part of his legacy. His proposal is to establish minimum retirement ages of 65 for men and 62 for women. (The life expectancy for men in almost half of Brazilian states is between 66 and 69 years.)
The proposal would also mandate an expansion of the periods that Brazilians must contribute to social security in order to receive benefits. The minimum period to see any benefits would increase from 15 to 25 years, and Brazilians would need to contribute for 40 years to earn full benefits. While Temer’s allies claim that the changes would save the government $169 billion over 10 years, those savings would be accomplished by giving fewer benefits to fewer Brazilians.
Loosened Pesticide Regulations
A priority of the “ruralist” caucus — a loose group of legislators that represents areas with heavy agricultural industry — is a bill dubbed the “poison bill” by critics, which would make it easier to provisionally approve the use of new pesticides before environmental and health agencies conclude their full review processes. The bill is ready to go to a vote in the lower house, which is widely expected soon after the elections. Originally proposed in 2002 by Blairo Maggi, a wealthy agro baron and current agriculture minister, it sat dormant for years. When Temer locked in ruralist support to approve his economic reforms, passing the “poison bill” was one of their conditions. Only then was it resuscitated to pass a special commission vote, led by a member of Congress who spent his career selling pesticides.
Another bill that aims to reduce the use of pesticides has been subjected to comparative foot-dragging. Presented in 2016, Maia, the head of the lower chamber, only authorized a special commission to discuss the bill in February. The discussion, however, was delayed for three month as it waited for Maia’s final sign-off.
Demarcation of Indigenous Lands
A bill to rework the way Indigenous lands are demarcated has been sitting in congressional filing cabinets since 2000. Now it is emerging as another lame-duck agenda item. Rep. Marcos Rogério, a conservative from the northern state of Rondônia, asked for the bill to be voted on in June, but it was sidelined as congressional leaders looked toward re-election.
The proposal would transfer authority from the executive branch to Congress to decide what land is protected for Indigenous groups, communities formed by the descendants of escaped and freed slaves (called quilombolas), and environmental conservation. The power to demarcate these lands, however, comes in tandem with the power to delist them.
The “ruralist” caucus — which, in practice, would be handed this demarcation power — currently has 261 representatives, the majority of whom are large landowners with a clear interest in diminishing protected territories. The text of the bill would also prohibit the expansion of existing preserves and allow for landowners to be retroactively compensated for claims that their land was placed under protection.
Mega-Auctions for Offshore Pre-Salt Oil Reserves
When state-controlled oil giant Petrobras discovered massive deep-sea oil reserves far off the coast of Rio de Janeiro, São Paulo, and Espírito Santo, it was celebrated nationally as if Petrobras had found the gold at the end of the rainbow. However, oil prices later tanked and extraction was more costly and complicated than promised. Then the Petrobras corruption scandal broke, amplifying right-wing calls for privatization and the reduction of Petrobras’s role in the extraction of the oil.
An estimated 5 billion barrels’ worth of contracts in the Santos Basin were already auctioned off to foreign companies in 2010, and a new bill would allow for the auctioning of the remaining drilling locations. In addition, the bill opens up space for other companies to operate in the six areas currently controlled by Petrobras. The matter has already been approved in the lower chamber and will likely be given priority in the Senate. The government estimates that the auctions could generate revenue in excess of $26 billion.
End Restrictions on Foreign Ownership in the Aviation Industry
Stuck in the lower chamber since the beginning of the year, a bill to end restrictions on foreign ownership in the aviation industry can be summarized as another market-friendly measure. While foreign ownership in the sector is currently limited to 20 percent, the new bill would allow foreign corporations with offices in the country to be the sole owners of aviation companies.
Establishing New Towns and Cities
The project allows for the creation of up to 400 new municipalities — and, consequently, new city halls and municipal legislatures, with many new, well-paid employment opportunities. But the new municipalities are estimated to cost at least $130 million per year to operate. The text of the bill is exactly the same as another one approved in 2014 and vetoed by Rousseff — precisely because of the economic impact. The new version already passed the Senate and is expected to go to a vote in the lower chamber imminently.
What If the Bills Don’t Pass in 2018?
Leandro Gabiati, the political scientist who has been following Brasília for 15 years, believes that even if the votes are delayed until 2019, they would still not meet tough resistance. Economic issues will likely receive the greatest focus in the lame-duck period, said Gabiati, in order to reassure the markets in anticipation of the next government. He cites as an example the opening of airlines to foreign capital, a priority of Temer. “The Congress-elect will be the most conservative in decades,” he said. “So if they do not pass specific items now, such as those linked to agrochemicals and abortion, there will be no problem for them if they go to a vote next year.”