On March 18, the Chamber of Deputies passed the legislative decree declaring a state of ‘public emergency’ in the country as a matter of urgency, given the COVID-19 pandemic. The proposal, sent by Bolsonaro, authorizes the Executive to spend in excess of its fiscal targets to finance measures against the pandemic. The bill is expected to be passed in the Senate in the next few days. 

The current Fiscal Responsibility Law establishes that, once a state of emergency is decreed, any limits on taking out debt to meet fiscal targets are suspended. After it was confirmed that two ministers and the Senate president had been infected, the Executive urged Congress to pass the bill in view of “the need to increase public spending to protect the health and employment of Brazilians.”

The decree also sets up a joint committee comprised of six deputies and six senators whose objective is to control government spending during the emergency period, scheduled to last until the last day of the year. According to the government, “it would be reckless in this context to comply with fiscal restrictions” since “it might mean paralysing the state apparatus at a time when it is most needed.”

In Brazil, legislative decrees are initiatives aimed at regulating matters which are the exclusive competence of Congress, and once approved by the Legislature, they cannot be vetoed by the President. In the Chamber of Deputies the vote was merely symbolic, since it already had the support of almost all party leaders. The initiative is soon expected to be debated in the Senate and if approved will go into effect until December 31, 2020.