PSD presidential hopeful backs spending cap, spares pensions - Valor International

Social Democratic Party (PSD) presidential candidate, Ronaldo Caiado, signaled Tuesday (25) night that, if elected, he would leave the current rules for increasing the minimum wage and pensions unchanged.

In an interview with TV Globo after its flagship nightly newscast Jornal Nacional, the former Goiás governor reiterated that he would send Congress a constitutional amendment capping spending growth at inflation plus 50% of the previous year’s GDP growth. He also indicated that he would preserve the minimum spending requirements for health and education.

Asked where he would cut spending and how large a fiscal adjustment would be needed to curb the rise in public debt, Caiado offered no figures or detailed measures. He said broadly that he would review subsidies and tax incentives, fight corruption, reduce what he considers excessive public-sector salaries and restrict congressional earmarks to initiatives included in the government program.

Pressed for specifics, Caiado compared the public finances to a patient who had been run over and would need to be examined before treatment could be prescribed.

“What are the areas you’re going to prioritize? Come on, I haven’t even examined the patient yet. Calm down,” he said.

He then listed areas he intends to address: “What do I have today in subsidies? What do I have in tax incentives? What do I have in corruption? What do I have in excessive salaries? What do I have today in mandatory congressional earmarks that are going somewhere other than the purpose of the program approved by voters?”

Caiado said he would preserve the current minimum-wage increase policy.

“I’m not going to touch it. Look, the poor guy earning the minimum wage, the poor guy living on a pension—leave them alone, for God’s sake,” he said.

The fiscal adjustment should begin elsewhere, Caiado said. “We’ll start by cutting where it hurts. We’ll go after these excessive salaries.”

The lack of detail extended to questions about Brazil’s pension system. Caiado acknowledged that population aging and the end of the country’s demographic dividend require a discussion about the system’s long-term sustainability, but offered no proposal.

Asked three times whether he would change the minimum retirement age, he did not answer.

“I’ll seek out the best minds in Brazil,” Caiado said.

Asked why those experts had not already been brought together during the campaign to present voters with a proposal, he replied: “I’m not in a position to spell out every detail.”

He later said he would pursue an administrative reform and cut spending beyond the executive branch.

“Cuts not only in the executive branch, but in the legislature, the judiciary, the Federal Audit Court [TCU] and every independent government body. All of them,” he said.

Caiado also said he would revisit parts of the tax reform approved by Congress. He criticized the model designed by economist Bernardo Appy, saying it was inspired by India and did not fit Brazil’s circumstances.

“He copied India’s model and brought it here. I went to India to see it. It has nothing to do with the Brazilian reality,” Caiado said.

While supporting tax simplification and acknowledging benefits for sectors that accumulate tax credits, he criticized the rate of the new value-added tax and the selective tax.

“What you can’t do is slap a 28% VAT on people and then create a selective tax that they ironically call a ‘sin tax.’ No—the one committing the sin is [President] Lula,” he said. The selective tax applies to goods and services considered harmful to health or the environment.

Accused of going easy on his main rival on the right, Senator Flávio Bolsonaro of the Liberal Party (PL), Caiado focused most of his attacks during the interview on President Luiz Inácio Lula da Silva. Lula’s name came up eight times, compared with just one mention of the son of former President Jair Bolsonaro.

Asked whether changing a tax overhaul approved after decades of debate would amount to a step backward, Caiado rejected the suggestion.

“There is no going backward. You revisit the issue. You take the parts that are positive and run simulations with others,” he said.

He said the impact should be reassessed for individual microentrepreneurs under the simplified MEI regime, small businesses, self-employed professionals, manufacturers and exporters.

Asked about the nearly 84 million Brazilians with overdue bills and the absence from his platform of specific funding amounts and sources for credit and guarantee programs, Caiado again offered no concrete debt-renegotiation proposal.

Instead, he attacked the federal government’s Desenrola debt-relief program, playing on its name, which means to “untangle” or resolve a problem.

“When Lula talks about Desenrola, he’s the one who tangled people up. Lula has become Brazil’s biggest loan shark,” Caiado said.

His proposed fiscal adjustment was again presented as the solution. Caiado said approval of his constitutional amendment would produce a “confidence shock” capable of sharply lowering interest rates.

“Once those measures are taken, the picture will be different. Interest rates will go to 6%, and inflation will go to 3%. So this isn’t a miracle,” he said.

Caiado also reiterated that he would send Congress a proposal granting a “broad, general and unrestricted” amnesty to those involved in the January 8, 2023, attacks on Brazil’s democratic institutions.

In defending the proposal, he again incorrectly claimed that Lula had been granted an amnesty by the Federal Supreme Court (STF).

“The Supreme Court says, ‘Look, the jurisdiction wasn’t correct, the case couldn’t have been there in Paraná.’ And suddenly he was granted an amnesty. In other words, a Supreme Court decision granted him an amnesty so he could even run for election again,” Caiado said.

Lula’s convictions were annulled by the Supreme Court; he was not granted an amnesty.

On public security, Caiado again proposed creating a South American police force to fight drug trafficking, money laundering and arms smuggling.

He said negotiations would be easier because of the political alignment of neighboring governments. “All the presidents of the countries bordering us today are center-right.”

The candidate became confused, however, when explaining the powers the proposed force would have. Citing Europol as a model, he said the European agency had “full authority to make arrests.”

After the interviewers corrected him, noting that Europol supports cooperation and information-sharing among national authorities rather than carrying out arrests itself, Caiado revised his answer.

“If there is any doubt about that, as president I will propose to my fellow presidents of neighboring countries that we make it possible for arrests to be carried out,” he said.

At the end of the interview, Caiado appealed to the Supreme Court to lift confidentiality restrictions during the campaign on investigations involving the National Social Security Institute (INSS), Banco Master and Operation Carbono Oculto (Hidden Carbon), an anti-money-laundering crackdown.

“I would ask them to think carefully and lift the secrecy so that tomorrow we are not deceived, with people involved in serious crimes ending up being elected,” he said.

This article was translated from Valor Econômico using an artificial intelligence tool under the supervision of the Valor International editorial team to ensure accuracy, clarity, and adherence to our editorial standards. Read our Editorial Principles.