Brazil Congress Approves Spending Boost in Setback for Rousseff

Brazil’s Senate approved legislation that raises government spending on salaries by 25 billion reais ($8.1 billion) over four years, a setback for President Dilma Rousseff’s strategy to reduce expenditures.

The Senate on Tuesday evening passed the bill that boosts pay for workers in Brazil’s judiciary system. Delcidio do Amaral, the government’s leader in the Senate, said Rousseff will veto the legislation, which previously was approved in the lower house.

Lawmakers are pushing back against the administration’s efforts to narrow the budget deficit as a shrinking economy and growing corruption scandal erode Rousseff’s popularity. Finance Minister Joaquim Levy has cautioned that failure to adopt the government’s belt-tightening measures could result in a sovereign-credit downgrade.

Judiciary workers pressured senators to approve the legislation on Tuesday by holding demonstrations outside Congress and observing the vote from Senate galleries. Members of the ruling Workers’ Party voted in favor of the bill, while Senator Cristovam Buarque of the allied PDT party said he would try to talk Rousseff out of vetoing the legislation.

Tuesday wasn’t Rousseff’s first setback in Congress, as the lower house last week passed an amendment that forces the government to boost spending on retirement benefits.

She has enjoyed some success. In May Rousseff won approval of three bills that raise taxes on imports and limit some unemployment and pension benefits. The measures were part of her fiscal-austerity package.

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