Pensions: a bridge too far for the Brazilian coup?

Yesterday there were large street demonstrations against the Temer government’s proposals for so-called “pension reform” in Brazil. These have received innumerable and authoritative academic critiques. This post is mainly about a popular critique, but let me begin with my fellow academics.

The government’s arguments about the size and causes of the claimed deficit in the national pension fund have been strongly challenged. The social regression implied by raising the retirement age to a universal 65 years for men and women without taking into account class and regional differences, not simply in life expectancy but expectation of life without incapacitating illness, has also figured prominently. The problems are exacerbated by the twenty year cap already imposed on public spending and the return to high rates of unemployment and irregular employment caused by the still deepening recession. A lifetime contribution-based state pension scheme does not work well for workers who cannot work continuously, if at all, in jobs that are covered by social security entitlements. Dismantling Brazil’s much praised non-contributory pensions scheme for rural workers would reverse the advances made in combatting rural poverty in recent years, since the benefits of that scheme help other members of the households in which pensioners live. Some ministers in this unelected government have made their view that state pensions should be set at minimum subsistence levels clear, along with their preference for private contributory schemes. Some key figures in Temer’s base have been shown by the independent press to have pecuniary interests in pushing private pension plans.

The response of Temer’s party, the PMDB, to criticisms of their proposed “pension reform” was to insist that if it was not carried through as specified, other social programs, in particular Bolsa Familia, would have to be terminated. Nobody on that side of the argument talks about the vast proportion of taxpayer’s money that goes to paying extraordinarily high interest rates on the public debt, or about how Brazil’s private banks also figure prominently in the list of large companies that owe unpaid employer contributions to the National Institute of Social Security. But what will happen now depends on Brazil’s congress. Its members will be making a decision about other people’s pensions from a position of extraordinary privilege in terms of their own pay and pensions.

It seems that the Brazilian people may have some thoughts about that. There follows a translation of a set of proposals that have begun to circulate through social networks in popular neighbourhoods that I received this morning:

There’s going to be trouble (a cobra vai fumar)

In three days, most people in Brazil will get this message.
This is an idea that really should be considered and passed on to the People.

The government wants the working people to pay the social security account that it made bankrupt.

They want to increase the retirement age to 65 years and not include the politicians and military.

We’re going to propose an amendment to the Federal Constitution by popular initiative: A Congressional Reform Law

1. Any secret and non-public sessions shall be abolished for any effective deliberation of either house of the National Congress.

All of its sessions are now open to the public and to the written, radio and television press.

2. Members of congress will be salaried only during their term of office. There will be no special pension for parliamentary service, but the period of office exercised will be counted as an addition to their time of contributing to the National Institute of Social Security in relation to their civil profession.

3. The Congress (congressmen and employees) contributes to the INSS. All contributions (past, present and future) to the current congressional pension fund will be transferred to the INSS regime immediately.

The Congressmen will participate in the benefits under the INSS regime just like all other Brazilians.

The pension fund cannot be used for any other purpose.

4. The congressmen and advisers must pay for their pension plans, just like all other Brazilians.

5. Congressmen are prohibited from raising their own salaries and bonuses beyond the salary growth patterns of the general population over the same period.

6. Congress members and their households lose their current health insurance paid by taxpayers and join the same healthcare system as the Brazilian people.

7. Congress must also comply with all the laws it imposes on the Brazilian people, without any immunity other than that relating to full freedom of expression when in the Congressional chamber.

8. Exercising a mandate in Congress is an honor, a privilege and a responsibility, not a career. Parliamentarians should not serve for more than two consecutive terms.

If each person passes this message to a minimum of twenty people, in three days most people in Brazil will receive this message.

If you agree with the above, PASS IT ON

Sounds like a plan to me. A better plan, perhaps, than waiting for the Supreme Court to bring the politicians denounced by Odebrecht executives to book, which isn’t likely to happen while it could contribute to derailing the coup. If they don’t manage to vote through an amnesty for themselves first, that is.