Temer and Earmark Populism by Mark Langevin

Brazilian President Michel Temer dodged a bullet yesterday by galvanizing a majority in the lower house of deputies of the Brazilian Congress to vote against his removal and trial by the Supreme Court for corruption. Temer’s approval ratings hover around 7 percent, and most Brazilians want him investigated for corruption; but these documented facts did not dissuade 263 deputies (from a total of 513) from absolving the president.

Why did so many betray the popular will?

Earmark populism is a method for obtaining the votes of congressional representatives and pacifying their constituents at home. President Temer used the promise of earmarks to trigger votes in his favor; and supply his congressional supporters with justification that can be sold to voters back home. According to the Folha de São Paulo’s report, Temer has promised more than 4 billion reais in additional spending in 2017, spread across dozens of earmarks, to obtain the necessary parliamentary support to stave off a trial in the Supreme Court. Contas Abertas also reports that Wladimir Costa, federal deputy from the state of Pará and member of the Solidariedade party, made famous by his tattoo “Temer” received a promise of $7 million reais in earmarks. Costa stated that his tattoo cost 1,200 reais and served as a memorial to Temer, “The best president in the history of Brazil.” His claim does not deserve a response.

Costa’s earmarks will apparently be spent on such programs as sustainable rural development and strengthening the universal health care program SUS in the state of Pará.  These seem to be worthwhile public initiatives, but the use of government funds to secure a vote to avoid prosecution for corruption is ironic and disappointing for those committed to fighting corruption in Brazil. Moreover, most of Temer’s supporters in the lower house of congress voted in favor of the impeachment of former President Dilma Rousseff last year for her fiscal management, her use of the so-called “pedaladas.” Many of these same deputies were willing to accept or coordinate earmarks just as the government appears to be failing to meet its fiscal deficit targets (spending more than forecasted to deepen the deficit).

Remember, many notable economists supported Dilma’s impeachment due to what they argued was fiscal mismanagement. Today, these economists are either silent or stand betrayed by the consequence of their own political action.

The well-respected economist Monica de Bolle defended her support for Dilma’s impeachment in the pages of Terraço Econômico, in part by claiming that the former president was responsible for fiscal mismanagement related to the pedaladas.  It is important to remember that the so called pedaladas were budgetary operations that simply delayed transfers from the Federal Treasury to the Banco do Brasil e Caixa Economica for public programs, including small farmer financial support and the Bolsa Familia social welfare programs.  Bolle and others, including Mansueto Almeida, claimed these budgetary actions were irresponsible at best and possibly constituted the “crime of responsibility” that served as the justification for impeachment. Then came Temer.

Today, Mansueto Almeida remains in his position with Temer’s government, but silenced by the President’s earmark populism to avoid prosecution. Monica de Bolle is a strident critic of Temer, and recently noted that he needs to leave or risk “institutional corrosion” that might place Brazil on the path to become another Venezuela. Ameida, last May, argued that the government must carry out a fiscal adjustment and push forward a reform agenda that can initiate economic recovery, and that two years under Temer is sufficient to place Brazil back on the road to growth and fiscal stability.

Monica and Mansueto are entitled to their critique of former President Dilma and her fiscal affairs. They both spent 2015 and 2016 trying to explain the details of the pedaladas and how they may have jeopardized fiscal stability and economic development.  However, Temer’s earmark populism and Attorney General Rodrigo Janot’s charge of corruption against the president pose a more straightforward challenge to explain. No doubt Monica and many others will bear down on the damage done by failing to achieve the fiscal targets set for 2017, and others including myself, will point to the now obvious connection between earmark populism and congressional efforts to protect the guilty from prosecution. Mansueto continues to work for Temer’s Finance Ministry, but for how long?  How long will it take for Mansueto and his boss, Finance Minister Henrique Meirelles, to understand that the government they work for is now actively working against fiscal stability, economic recovery, and the Lava Jato prosecutions?

I hope it does not take too long because Brazilian democracy hangs in the balance.