Brazil Lawmakers Approve 20-Year Public Spending Cap

Brazil's lower house on Monday approved a proposal to cap public spending increases for 20 years, a key component of new President Michel Temer's economic recovery program.

Temer, from the center-right PMDB party, has vowed far-reaching reforms to drag Brazil out of its worst recession in almost a century.

The spending cap, which requires a constitutional amendment to limit budget increases to the rate of inflation for the next 20 years, would mean freezes in health, education and other key areas.

The measure was approved by 366 deputies out of 480 present, well above the required three-fifths majority of 308 votes. One hundred and eleven lawmakers in the Chamber of Deputies voted against it.

The measure still requires another vote in the lower house before heading to the Senate for final approval, likely by the end of the year.

Leftist lawmakers had fought against the spending cap, arguing that it would dramatically worsen conditions for ordinary Brazilians, especially the poor.

Brazil has shifted to the right in the wake of August's impeachment of former president Dilma Rousseff, of the once-dominant leftist Workers' Party, and her replacement with Temer.

The proposal's approval on its first vote was an important victory for Temer, who plans to enact labor law and pension reforms next year.

Temer has warned of state "bankruptcy" if the country does not impose painful reforms.

Brazil is in the grips of a painful recession, with its GDP contracting 3.8 percent in 2015 and likely to slip another 3 percent this year. 

Unemployment has doubled in that time, hitting 12 million Brazilians, or more than 11 percent of the workforce.