RIO DE JANEIRO -- Last month's back-to-back deaths of Brazilian President Fernando Henrique Cardoso's top two congressional negotiators might not slow down the passage of a social security amendment, as was initially expected.
President Cardoso, counting on a wave of bipartisan solidarity in homage to those leaders, personally has taken on the task of keeping the final-round vote on the amendment on track for May.
Still, the loss of these hard-to-replace political allies is a substantial blow to the government's reform program in general.
Communications Minister Sergio Motta, who died of a rare respiratory illness, and Luis Eduardo Magalhaes, the government's floor leader in the Chamber of Deputies, the lower house, who had a heart attack, worked in tandem to spearhead virtually all government legislation, and in particular social security reform, through Congress.
Mr. Magalhaes bargained on behalf of the government inside the Chamber of Deputies and Mr. Motta, Cardoso's chief political coordinator and confidant, sealed those deals by doling out the necessary pork. Mr. Magalhaes, in collaboration with Mr. Motta, also set down the order in which reforms were introduced in the chamber and the moment to vote on them. As the government's lower-house floor leader, Mr. Magalhaes never lost an important vote.
The depth of those losses has forced President Cardoso to personally take charge of getting social security reform through Congress. The social security amendment, in the legislative mill for the past three years, has been passed twice by the Senate and once by the Chamber of Deputies, needing only one more chamber vote to pass by the necessary three-fifths majority.
The amendment's approval should save the government some $4.4 billion a year in pension payments beginning in 1999, when it would take effect, thus helping close the huge budget deficit (5.9% of the gross national product in 1997) and help keep its economic stabilization program on track.
The amendment's key measure links social security payouts to age and length of contribution, not to the number of years worked, as is now the case. Another key measure reduces social security benefits for civil servants earning more than $1,100 per month to up to 70% of their last salary (Pensions & Investments, Feb. 23).
But the Chamber of Deputies, before passing the amendment, must vote on two proposed changes which challenge these two measures. One change would link payouts to the length of contribution and not to both length of contribution and age. The other would eliminate reduced benefits for the civil servants making more than $1,100 a month. Only this second change stands some chance of passage, given that passing the first change would so dilute the amendment that it wouldn't sufficiently cut government payouts. But the passage of either of these changes would force the social security bill back to the Senate for a final vote. Mr. Cardoso vowed to maintain the scheduled April 29-30 deliberations on the proposed changes, followed by votes on them, so that a final-round vote on the amendment can take place as scheduled this month -- if the challenges are defeated.
"I think there's a good chance Cardoso will get the social security amendment through the Chamber of Deputies by May without modification," said Walder do Goes, a Brasilia-based political risk consultant. "He will do so by personally spearheading the amendment-approval push, betting on bipartisan support for it in tribute to Motta and Magalhaes."
Eduardo Machado, the project director of the Association of Brazilian Pension Funds, is not quite so upbeat about the amendment's chance of a May passage.
"This is an election year and congressmen running for office will think twice about voting for the highly unpopular social security amendment and thus tarnishing their images," said Mr. Machado. "Whether the amendment is passed in May depends basically on how well Cardoso can rally bipartisan support around the memories of Motta and Magalhaes."
If the social security amendment doesn't pass this month, it might not pass until late this year or early next year, said political analysts. State party conventions to choose candidates for October's national elections begin in June and all of the chamber seats and one-third of the Senate seats are up for election. June and July mark the World Cup soccer tournament, which seriously reduces congressional attendance. And congressmen will begin campaigning for re-election in August.
"Given the combination of a nationwide election October and the World Cup in June/July, if the social security amendment isn't passed in May it probably won't get passed until next year,"said Brasilia-based political scientist David Fleischer. "Still, I'd say that if Cardoso succeeds in turning the losses of Motta and Magalhaes into political trump cards in Congress, there's a 60% chance that social security reform will pass in May."