A plan to increase cash handouts for poorer Brazilians could boost President Jair Bolsonaro’s re-election chances, but it will also risk casting doubt on the country’s long-term commitment to fiscal consolidation. On July 13, lawmakers in the lower house of Brazil’s Congress approved a proposed amendment to the constitution that places the country under a state of emergency until the end of 2022 to allow the government to spend $7.6 billion in economic aid measures. The legislation includes cash handouts for truckers and teachers, two sectors that have protested in recent weeks. It also expands the country’s cash-transfer program, Auxilio Brasil, in terms of both the government funding allocated to the program and the number of recipients who qualify. The move to raise subsidies for the poor will be popular among Brazilians at a time of rising inflation and slowed economic growth. Congress is thus expected to approve the amendment,...
