- The Washington Times - Monday, June 28, 2004

SAO PAULO, Brazil — This country’s center-left administration needs the help of the political right in the Congress to support its proposed minimum-wage increase, according to a top presidential adviser.

The appeal by Chief of Staff Jose Dirceu came after President Luiz Inacio Lula da Silva suffered the worst defeat of his 18-month administration this month when senators voted against his minimum-wage increase in favor of a bigger one.

The June 17 decision by the Brazilian Senate to raise the minimum wage from 240 reals (about $77) a month to 275 reals (around $88) was a coup for rivals of Mr. Lula and his Workers Party (PT).

“Lula,” as he prefers to be called, and the Workers Party had been pushing for weeks for a minimum wage of 260 reals ($83) per month. It had already won congressional approval and insisted the 20-real increase was all the federal budget could afford.

“We are in a center-left coalition government with support from sectors of the right,” said Mr. Dirceu. “We are not ashamed of this support. On the contrary, we need and are thankful for this support.”

The wage vote must now return to the lower house, which already approved the 260-reals rate. If the 275 reals-per-month wage is passed by congressional lawmakers, Mr. Lula still has an opportunity to veto it.

Mr. Dirceu said that the Congress needs to address this issue as soon as possible — indicating he would like to see a vote some time this week — so that the administration can continue its pursuit of its reform agenda.

“We have reforms and important projects to approve in the Congress still,” he said on Sunday. Since assuming office in January 2003, Mr. Lula da Silva has pushed for several political and economic reforms with varying success. However, the defeat of his new wage threatens to unravel some of his social projects.

Earlier this month, Finance Minister Antonio Palocci said an additional 15-real increase to 275 reals a month would cost the government 1.8 billion reals a year ($576 million), forcing the government to cut social programs already hampered by a lack of funds.

But opposition lawmakers criticized the president’s proposed wage, saying it was too low. The new wage measure must now be approved in the Congress and could still be vetoed by Mr. Lula da Silva.

Leading up to the vote, Workers Party lawmakers said the wage would have a hard time passing a divided Senatek, where the ruling party enjoys only a slight advantage on paper regarding the number of Workers Party and allied party senators in the upper house.

Both Workers Party Sens. Aloizio Mercadante and Paulo Paim expressed their pessimism at the wage being passed, with the latter saying many lawmakers would disapprove simply because the raise was too little.

The government knows that it is impossible to convince somebody to vote for 260 in good conscience,” said Mr. Paim, who was one of three Workers Party senators to break ranks and vote for the higher wage.

Party solidarity is very important in Brazilian politics since about 20 parties are represented in the Congress. Going against the official party line is considered treasonous and grounds for expulsion. Earlier this year, the Workers Party expelled from its ranks the outspoken Sen. Heloisa Helena for voting against Lula da Silva-proposed social security reforms.

With the vote, opposition leaders seem to be relishing the victory and the precarious position in which the issue puts Mr. Lula da Silva and the Workers Party.

One of Brazil’s most influential senators, Antonio Carlos Magalhaes of the right-wing Liberal Front Party, said Friday that the defeat of Mr. Lula da Silva’s wage increase shows that the president doesn’t possess the “affability” to negotiate effectively with the Congress.

“In the hour of truth, he is going to see that he has even fewer than 31 votes in the Senate,” said Mr. Magalhaes, referring to the number of senators that did vote for a 260-reals wage.

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