BRASILIA, Aug 26 (Reuters) - Brazil's President Jair
Bolsonaro said on Wednesday he had rejected a proposal by his
Economy Minister Paulo Guedes for a new cash welfare program
called "Renda Brasil" because it would involve cutting other
The disagreement highlights the split between Guedes, who is
struggling to keep Brazil's fiscal deficit under control, and a
president whose popularity and re-election chances have risen
thanks to the financial assistance distributed during the
The two are also at odds over the government's plan to
extend emergency pandemic payments to low-paid and informal
workers until the end of the year, currently 600 reais ($106)
per month, which the minister wants to cut to under 200 reais.
The rift sent the Brazilian currency down 1.5% against the
dollar and saw the Bovespa index in Sao Paulo fall 2.2% by
The Economy Ministry issued a statement quashing speculation
that Guedes was planning to quit.
Brazil's emergency pandemic payments, known as the
"coronavoucher," has benefited 30 million households, or 44% of
the country's total, since March.
Recent opinion polls show these payments were a key factor
in boosting the popularity of right-wing Bolsonaro to its
highest since taking office last year, especially in the poorest
region, northeastern Brazil, once a stronghold of the left.
But Guedes has said the pandemic handouts cost the Treasury
50 billion reais a month and are fiscally unsustainable.
To hold on to his newfound support, Bolsonaro is seeking to
rebrand Bolsa Familia, the popular cash transfer program
launched in 2003 by former leftist President Luiz Inacio Lula da
Silva, which helped build a bastion of support for his Workers'
Renamed Renda Brasil, Bolsonaro hopes to expand the welfare
payments to an additional 7 million poor families, taking it to
a total of 21 million, and to increase the stipend.
But the president said he was unhappy with the way the
Economy Ministry had proposed funding Renda Brasil, via cuts in
other social programs such as the salary allowance scheme that
many low-paid workers qualify for.
Bolsa Familia, which enjoys widespread popularity and
support, costs the Treasury around 30 billion reais ($5.5
billion) a year.
"I can't take from the poor to give to the poor. I cannot
take away 12 million people's salary allowance to give to a
Bolsa Familia or Renda Brasil, or whatever," Bolsonaro said at
an event in the state of Minas Gerais.
(Reporting by Lisandra Paraguassu; Writing by Jamie McGeever
and Anthony Boadle; Editing by Lisa Shumaker and Bernadette