Bolsonaro’s Social Spending Defies Austerity Drive in Brazil

The biggest challenge to Economy Minister Paulo Guedes’ plan to reimpose austerity in Brazil next year comes from his own boss, who is pushing for a new and costly social program designed to solidify his support among the poor.

President Jair Bolsonaro wants the initiative called Renda Brasil, or Brazil Income, to replace emergency aid provided by the government during the pandemic, including monthly stipends to informal workers that will expire by the end of the year. While the plan has been under discussion for weeks, it is now becoming clear that it may force the government to abandon a spending cap rule that investors consider as the country’s last line of defense against runaway budget gaps.