New leaders in Brazil’s Congress unlikely to bring respite for a struggling Lula

By Ricardo Brito

BRASÍLIA (Reuters) - Brazilian President Luiz Inácio Lula da Silva is bracing for another two years of struggle with the nation’s Congress, as lawmakers convene on Saturday to potentially elect leaders to both the House and Senate who have promised to continue exerting tight control of an overstretched federal budget.

Legislators are expected to elect Hugo Motta as speaker of the House and Davi Alcolumbre for the Senate presidency. The two lawmakers have gained support from conservatives and liberals alike partly by promising to fight for Congress to determine how to spend an ever-bigger share of Brazil’s federal budget, with little regard for the Lula administration’s policy priorities.

Members of Congress control almost one-quarter of funds the government has available to make investments and pay for enacting its own policies, a share that has grown significantly in the last decade.

“The fight is likely to continue and intensify,” said Creomar de Souza, head of the Dharma political consultancy firm.

It is poor timing for Lula, who is facing lower approval ratings, while dealing with pressure to deliver on his biggest promises to voters and also from investors who are increasingly concerned his administration is spending too much.

A Genial/Quaest poll, released on Monday, showed 47% of those surveyed approved of Lula's performance as president, down from 52% in December and the lowest since he took office in January 2023.

Lula is likely to run for a fourth non-consecutive term in 2026.

Motta was selected by outgoing speaker Arthur Lira, who, since he was first elected speaker in 2021, significantly increased the share of the federal budget that representatives can spend on projects they choose.

Motta started his political career in Brasília under the wing of another House speaker, Eduardo Cunha, who in 2016 led efforts to impeach President Dilma Rousseff, Lula’s handpicked successor after his first two terms as president.

TOUGH SCENARIO FOR LULA

Both Motta and Alcolumbre are expected to follow the leadership styles of Arthur Lira, the outgoing house speaker, and Rodrigo Pacheco, the outgoing Senate president.

That scenario, Souza argued, is a tough one for Lula, who faced difficulties dealing with Congress in the last two years. One of Lula’s priorities is to pass a bill that exempts people who earn less than 5,000 reais ($850) from income taxes, while increasing taxes on the super-rich.

Allies of the Lula administration in Congress told Reuters, under condition of anonymity so they could speak candidly, that support for the government is not certain. Many believe the president will need to appease Alcolumbre.

Alcolumbre will want an ally in the cabinet, a senior source of Lula’s Workers Party in the Senate said.

“Either the government pays and delivers what he wants, or it will have a problem,” the source said.

During a rare press conference on Thursday, Lula told reporters he would not meddle in Saturday’s election in Congress.

“Whoever wins, I will respect,” he said. “I won’t have difficulties in the relationship with Congress.”

(Reporting by Ricardo Brito; Writing by Manuela Andreoni; Editing by Rod Nickel)