Amid the gloom surrounding Brazil's economy — shrinking growth forecasts, double-digit unemployment and rising public debt — Wednesday's lower house vote to reform the pension system marks a significant step forward.
In a 379 to 131 vote, lawmakers approved the base text of a reform that will result in significant savings for the government and finally establish a minimum retirement age for Brazilians. While the bill still faces a number of legislative hurdles before becoming law, including amendments that could sap its strength, the draft legislation has now overcome its most challenging obstacle.
In an emotional speech, House Speaker Rodrigo Maia said lawmakers' leading role in the reform strengthens Brazil's democracy and will eventually bring investors back to the country. "I'm increasingly convinced of the necessity of reform," he said. "This is a historic moment for all of us."
Brazil spends much more on its pensions than most peer countries, and offers more generous terms, particularly to its well-paid civil servants, many of whom retire in their 50s. The vast, multibillion dollar deficits in its pension funds are driving up Brazil's public debt to unsustainable levels and risk consuming the entirety of the federal budget.
Already Brazil spends 10 times more on payments to retirees than on education. With a rapidly aging population, and a constitutional limit on public spending, the current system is a ticking time bomb that threatens to devastate the country's fragile economy and condemn Brazil to many more years of sub-par growth.
Wednesday's vote was no mean achievement, given four previous administrations had tried — and failed — to enact a major reform. The margin of victory was also significantly above the minimum threshold of 308 votes and bodes well for its future passage.
President Jair Bolsonaro celebrated the decision on Twitter and congratulated Maia for his role in its approval.
Opposition lawmakers, however, lambasted the proposed legislation, claiming that it served only to entrench Brazil's current system of privileges and burden yet further the poor.
"A lamentable decision of a majority who voted just looking at numbers, and not at people," said Alessandro Molon, the leader of the opposition. "We are going to fight now to reduce the negative impact of this reform via amendments."