Senate Committee Approves Government's New Fiscal Rules

Reuter's reporting that the Brazilian Senate's Economic Affair's Committee has voted to approve President Luiz Inacio Lula da Silva's new fiscal rules, sending the legislation to a full Senate vote.

• A successful Senate vote would synchronize the Senate with the lower chamber, which approved the new rules in a 372-108 vote last month.
• Reuters reported after last month's Chamber of Deputies vote: "Under the new fiscal rules, government expenditures will not be allowed to rise by more than 70% of any increase in revenue, with spending growth also limited to between 0.6% and 2.5% per year above inflation."
• Institutional Relations Minister Alexandre Padilha said: "It was an important victory for the country. This measure will allow for sustainable growth combining social and fiscal responsibility."
• Finance Minister Fernando Haddad noted that the strength of the Chamber of Deputies bodes well for future projects including tax reform legislation expected to come in front of Congress later this year.