Constitutional Amendment no. 95 | |
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National Congress of Brazil | |
Citation | PEC 241/2016 |
Territorial extent | Whole of Brazil |
Passed by | Chamber of Deputies |
Passed | 25 October 2016 |
Passed by | Federal Senate |
Passed | 13 December 2016 |
Signed by | Senate President Renan Calheiros Chamber President Rodrigo Maia |
Signed | 15 December 2016 |
Effective | 15 December 2016 |
Legislative history | |
First chamber: Chamber of Deputies | |
Bill title | Constitutional Amendment Bill no. 241 of 2016 |
Bill citation | PEC 241/2016 |
Introduced by | Executive Branch |
Introduced | 15 June 2016 |
First reading | 15 June 2016 |
Second reading | 6 October 2016 |
Voting summary |
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Third reading | 25 October 2016 |
Voting summary |
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Second chamber: Federal Senate | |
Bill title | Constitutional Amendment Bill no. 55 of 2016 |
Bill citation | PEC 55/2016 |
Received from the Chamber of Deputies | 26 October 2016 |
First reading | 26 October 2016 |
Second reading | 9 November 2016 |
Voting summary |
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Third reading | 13 December 2016 |
Voting summary |
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Status: In force |
Constitutional Amendment (Emenda Constitucional - EC) No. 95, also known as the Constitutional Amendment of the Public Expenditure Cap, changed the Brazilian Constitution of 1988 to institute the New Fiscal Regime or New Fiscal Framework[1] with failures.[2][3][4] It imposed a limit on the growth of the Brazilian government's expenses for 20 years, extending to all three branches of the government, in addition to the Public Prosecutor's Office and the Public Defender's Office. During the legislative process, the Constitutional Amendment Bill (Proposta de Emenda à Constituição - PEC) received several names: "PEC of Expenditure Cap", "PEC 241" in the Chamber of Deputies and "PEC 55" in the Federal Senate. Its opponents coined the epithet "PEC of Death".[5]
Public spending and investments were limited to the same amounts spent in the previous year, adjusted for inflation[6][7] measured by the national Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo - IPCA). This was a proposed amendment to the Transitional Constitutional Provisions Act (Ato das Disposições Constitucionais Transitórias - ADCT), with validity set for the next 20 years, and from the tenth year on the President of the Republic may change this correction of public spending through a Supplementary Law. In the year 2017, there were no changes in the areas of Health and Education.[8] Both areas had a mandatory minimum spending limit corresponding to a percentage of the Union's Net Current Revenue (Receita Corrente Líquida - RCL) determined by the Federal Constitution. From 2018, the floors began to be adjusted by the value of the previous year adjusted by the IPCA between July of the previous year and June of the current year.[9][10][11] Critics of the measure claimed that the constitutional floors would fall over time if the revenue starts to grow more than inflation in the coming years.[12]