Brazil Congress Delays Debt Relief Vote as Headwinds Intensify

(Bloomberg) -- Brazil's lower house of Congress pushed back a vote on debt relief for the country's cash-strapped states, after a six-hour debate on Wednesday night revealed serious opposition to the government's austerity measures.

Lawmakers are discussing a bill that would offer states debt relief in return for increasing civil servants' pension contributions, selling off public companies, capping payroll and other austerity measures. Ahead of Wednesday's deliberations, the government watered down the bill in the hope of securing enough support for its approval. House Speaker Rodrigo Maia said on Thursday that the vote was postponed due to a possible lack of quorum. No date has been set for a new vote.

The government of President Michel Temer has suffered a number of setbacks in recent days. On Tuesday, the lower house voted through a government-sponsored bill on Uber and other ride-sharing apps that had been significantly amended by the opposition. Earlier on Wednesday, the newspaper O Estado de S. Paulo published a survey showing the government is currently far short of the congressional votes it needs to pass pension reform.

The states of Rio de Janeiro, Rio Grande do Sul and Minas Gerais would be eligible for relief under the government's proposal, with Goias, Mato Grosso do Sul, Santa Catarina, Sao Paulo and Rio Grande do Norte also close to meeting the required criteria. Opposition deputies, however, are seeking a more expansive program that would help other states in financial distress.

To contact the reporter on this story: Rachel Gamarski in in Brasilia at rgamarski@bloomberg.net.

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Bruce Douglas