Rousseff Suffers Defeat as Cunha Elected Head of Lower House

Brazil’s President Dilma Rousseff suffered the first political defeat of her second term as the lower house of Congress elected Rio de Janeiro congressman Eduardo Cunha as its president for the next two years.

Cunha, a 56-year-old economist serving his fourth term in the lower house, won 267 votes from the 513 representatives, to 136 votes for Arlindo Chinaglia, a member of Rousseff’s Workers’ Party.

While Cunha is a member of the Brazilian Democratic Movement Party, or PMDB, the biggest allied party in the governing coalition, he has long been an opponent of Rousseff’s. His differences with the government have ranged from taxes earmarked for health care to the rules for ports concessions, said independent political consultant Andre Pereira Cesar.

“Cunha will have the power to set the voting agenda and he could make it really difficult to pass austerity measures,” Cesar said in a phone interview from Curitiba. “It is a defeat for the government since they did whatever they could to elect Chinaglia.”

Unemployment Benefits

Rousseff will need congressional approval for the 2015 budget law and some measures aimed at tightening fiscal discipline, such as the cut in unemployment benefits and some pensions announced in December that aim to reduce spending by 18 billion reais ($6.71 billion) per year. Further tax increases and cuts in spending may also require lawmakers’ approval.

Cunha’s campaign used “Independent Lower House” as its slogan in a message meant to antagonize Rousseff, Cesar said. In an interview Jan. 27, Cunha said he will take a position of “neither opposition nor submission” to the presidency.

“Lawmakers reacted to the government’s attempt to interfere in the vote,” Cunha said in his victory speech. “I will not look for any retaliation, but we will have a more independent lower house.”

The dispute between candidates of the two biggest parties in the ruling coalition will also create tension in Congress for future votes, Cesar added. “Rousseff will need to manage unsatisfied congressmen, and this may make it even harder for her government,” Cesar said.

“We expected more votes,” Vicente Paulo da Silva, the Workers’ Party leader at lower house, said. ’’Now we have to accept this and work to rebuild the ruling coalition.’’

Senator Renan Calheiros was chosen today to be president of the Senate. A PMDB member, he won 49 votes among the 81 senators, to 31 votes for his PMDB colleague Luiz Henrique.

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