The Chamber of Deputies approves a constitutional amendment that removes court-ordered payments from the 2026 spending limit.

The Chamber of Deputies approved on Tuesday night (15) the proposed amendment to the Constitution (PEC) 66/23, from the Senate, which changes the rules on court-ordered debts. The text was approved in two rounds. In the first, the score was 404 votes in favor and 67 against. In the second, it was 367 votes to 97.

The deputies rejected the amendments presented by the parties to try to amend the text. The text now goes to the Senate. Precatórios are payments owed by the federal government due to final court rulings, and the amount must be included in the budget.

The text removes federal court-ordered debts from the Executive's primary spending limit starting in 2026; limits the payment of these debts by states and municipalities; and refinances these entities' social security debts with the Union.

Initially, the PEC only dealt with municipal court orders, but the rapporteur, Congressman Baleia Rossi (MDB-SP), included the possibility of excluding federal court orders from the spending cap.

In November 2023, the Supreme Federal Court (STF) authorized the payment of court-ordered debts by the Lula (PT) government without violating fiscal rules until 2026. The Ministry of Planning pointed out that the decision would leave the Budget without room for mandatory expenses from 2027 onwards.

To resolve the impasse, the rapporteur removed federal court-ordered debts from the Executive branch's primary spending limit starting in 2026 and determined that the amount will be gradually included in the target at a rate of 10% of the debt stock per year. The transition period will last 10 years.

The government estimates an impact of R$516.3 billion from court-ordered payments from 2026 to 2029. This year, the total paid will reach R$102.7 billion.

Municipalities

Constitutional Amendment 109/2021 established that the payment of municipal court-ordered debts must be settled by the end of 2029. The rapporteur removed the deadline and determined that the debt adjustment will be based on the IPCA (Brazilian Consumer Price Index) plus 2% simple interest. The current rule provides for adjustment based on the Selic rate, which is currently 15% per year.

The bill extends the installment plan for municipal and state debts to Social Security from 60 to 300 months (25 years). The adjustment will also be calculated based on the IPCA (Brazilian Consumer Price Index), plus real interest rates ranging from 0% to 4%, and with the possibility of early payment through asset transfers, similar to the State Debt Payment Program (Propag).