CMO President promises to block “electoral” spending for 2026

The president of the Joint Budget Committee (CMO), Senator Efraim Filho (União Brasil-PB), declared this Tuesday (June 10, 2025) that he will not allow an increase in expenses in social programs that, according to him, have an electoral bias with a focus on the 2026 elections. In an interview with the newspaper O Estado de S. Paulo , Efraim directly cited Pé-de-Meia and Vale Gás as examples of initiatives that can be used for electoral purposes.

“With all of the government’s fundraising efforts, the CMO will be very careful not to use it as a means to increase spending on electoral projects in 2026, such as Vale Gás and Pé-de-Meia . This strategy will not find support,” said the senator.

Efraim's speech comes amid the federal government's offensive to recover revenues, after backing down on the increase in the IOF (Tax on Financial Transactions). Finance Minister Fernando Haddad announced new tax measures to compensate for the loss of revenue, including the taxation of electronic bets and the taxation of currently exempt securities, such as LCI (Real Estate Credit Letters) and LCA (Agribusiness Credit Letters).

Despite being part of the government's allied base and maintaining close ties with the president of the Senate, Davi Alcolumbre (União-AP), Efraim expressed concern about what he calls the "insistence on tax increases" on the part of the economic team. He argued that fiscal balance should be sought not only by increasing revenue, but also by containing public spending.

“The commission’s premise will be fiscal balance, to avoid the feeling of unbridled spending that impacts society and drives away investments in Brazil,” said the senator, who took over as CMO president in April. “Fiscal balance is not only achieved on the revenue side, by increasing taxes or rates, but also on the expenditure side, qualifying public spending, reducing costs and eliminating waste.”

The rapporteur for the 2026 Annual Budget Bill (PLOA) is in charge of Congressman Isnaldo Bulhões (MDB-AL), leader of the party in the Chamber. The rapporteur for the Budget Guidelines Law (LDO) was Congressman Carlos Zaratini (PT-SP), nominated by PT leader Lindbergh Farias (RJ).

The CMO was installed on April 10, less than a month after the approval of the 2025 Budget, which had its vote postponed at the end of last year to prioritize the spending cuts package presented by the Lula government. Now, with the budget debate for 2026 on the agenda, the tone of the commission promises to be one of greater fiscal rigor, especially given the proximity of the electoral calendar.