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POLITICS

Lula administration picks a fight with Congress

Lula's coalition: unreliable bedfellows. Photo: Ricardo Stuckert/PR

Lula's coalition: unreliable bedfellows. Photo: Ricardo Stuckert/PR

In a move that underscores Brazil’s deepening institutional rifts, the Luiz Inácio Lula da Silva administration is taking its battle with Congress over a tax hike to the country’s Supreme Court.

The government is expected today to file a lawsuit seeking to overturn a humiliating defeat suffered last week, when lawmakers overwhelmingly repealed a presidential decree that raised the IOF, a tax on financial transactions. As Congress blocked the tax hike, the Finance Ministry was left scrambling for revenue to make ends meet.

Technically, the government didn’t need to sue: the far-left Socialism and Freedom Party (PSOL), an ally, had already filed a case challenging Congress’s decision based on a technicality. But Lula’s team is making a broader point …

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