Bolsonaro Advised to Extend Covid Cash as Popularity Falls
(Bloomberg) -- President Jair Bolsonaro is contemplating a new round of Covid cash handouts for low-income Brazilians as his popularity sinks ahead of next year’s elections, according to five officials with knowledge of the matter.
The idea is being pushed by political advisers close to the president, who worry about a delay in government plans to bolster and rebrand the country’s permanent cash transfer policy, the people added, requesting anonymity because the discussion isn’t public.
Bolsa Familia, as the current program is known, was introduced in 2003 during the administration of Luiz Inacio Lula da Silva, who’s likely to challenge Bolsonaro in elections next year. Economy Minister Paulo Guedes has yet to approve in congress a solution to expand it without breaking a rule that limits the growth of public expenditure to inflation.
A new round of Covid assistance would be a temporary but easier solution. It could be paid for with extraordinary funds approved by the president, which don’t have to comply with the spending rule this year due to the pandemic.
Bolsonaro’s office didn’t immediately reply to a request for comment. The economy ministry said Guedes doesn’t work with the possibility of a new round of Covid cash, but rather to launch the new social program.
Inflation running at more than 9% a year, double-digit unemployment and an erratic handling of the coronavirus crisis are weighing on Bolsonaro’s popularity.
Increasing cash transfers directly to the poor could provide a boost to his poll numbers, as it happened last year when generous monthly stipends sent his approval ratings soaring to all-time highs. Now the president wishes to boost Bolsa Familia payments to 400 reais ($77.14) a month, more than double the current average of 192 reais. The economy minister says there would be no money left in the budget for anything beyond 300 reais.
Brazil’s program of Covid cash handouts has been renewed a few times, with less generous terms, since being introduced last year. It has cost public coffers 36 billion reais ($6.9 billion) this year up until July, according to the Treasury.
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