Explaining Brazil #320: Brazil's Congress elects new leaders

What we discussed (short)

Gustavo Ribeiro: Welcome back to Explaining Brazil. I'm Gustavo Ribeiro, Editor-in-Chief of The Brazilian Report.

Before we dive into this week’s episode, a quick announcement.

The Explaining Brazil podcast is evolving. Over the past seven years, we've heard from our listeners that they want to know more about the articles and newsletters we publish. This transformation is part of a larger shift at The Brazilian Report. Back in December, we transitioned into an all-newsletter publication, delivering our reporting directly to readers' inboxes. This shift has paid off, and now we’re applying the same strategy to our podcast.

From now on, every Friday, we’ll bring you a sharp, concise recap of the biggest stories of the week—your essential guide to Brazil’s most important developments. Think of it as a preview of the in-depth coverage found in our newsletters. Additionally, once a month, we’ll feature a special episode with expert guests discussing pressing issues in Brazil and Latin America.

Since this is our first episode of the year, we have something special for you—a conversation with columnists Beatriz Rey and Mário Sérgio Lima about the upcoming congressional leadership elections, their impact on the Lula administration, and major legislative projects like Brazil’s sweeping tax reform.

A Look at the New Congressional Leadership

Gustavo Ribeiro: Good morning, everyone. Welcome to today’s webinar—our first of 2025—on a crucial topic for Brazil’s political landscape: the elections for the leadership positions in Congress. We’ll discuss how these elections will shape the balance of power, impact the Lula administration, and influence key legislative initiatives.

I’m joined today by two incredible guests: Beatriz Rey, a political scientist and expert in Brazilian politics and legislative transparency, and Mário Sérgio Lima, a journalist and senior Brazil analyst at Medley Global Advisors. Thank you both for being here.

Beatriz Rey: Thank you. It’s a pleasure.

Mário Sérgio Lima: Thank you. Happy to be here.

The Lira-Pacheco Years: A Retrospective

Gustavo Ribeiro: Let’s start by reflecting on the past four years under House Speaker Arthur Lira and Senate President Rodrigo Pacheco. Beatriz, how would you characterize their leadership?

Beatriz Rey: It’s important to analyze the House and Senate separately. In the House, Lira's leadership was marked by aggressive negotiation tactics. He had a difficult relationship with the Lula administration, while his tenure under Bolsonaro was much smoother. One of the key challenges was the lack of direct communication between the government’s chief negotiator, Alexandre Padilha, and Lira himself.

In contrast, Pacheco acted as more of a diplomat. Though he had tensions with the judiciary, he maintained a better working relationship with both Bolsonaro and Lula. However, transparency in Congress declined under Lira’s leadership, especially regarding budgetary grants.

Gustavo Ribeiro: Let’s touch on that. There has been significant controversy over congressional budgetary grants, which give lawmakers control over federal funds for projects in their districts. Beatriz, you’ve written about how these grants, originally intended to improve efficiency, have been misused.

Beatriz Rey: Yes, in principle, these grants should ensure fair distribution of federal funds, allowing lawmakers to allocate resources where needed. But over the years, they became mandatory expenditures, reducing executive control. Under Bolsonaro, this led to the infamous "secret budget" scandal, where funds were distributed without transparency. Under Lula, we’ve seen a similar misuse through committee grants, further eroding oversight.

Mário Sérgio Lima: I’d add that this has given Congress unprecedented power over the budget—far more than in most democracies. While corruption is a concern, the bigger issue is poor allocation of funds. It has created a system where lawmakers prioritize individual gains over national interests.

Meet the New Leaders: Hugo Mota and Davi Alcolumbre

Gustavo Ribeiro: Now, let’s turn to the new congressional leaders—Hugo Mota in the House and Davi Alcolumbre in the Senate. Beatriz, who is Hugo Mota, and how did he rise to power?

Beatriz Rey: Mota is set to become the youngest House Speaker in Brazilian history at just 35 years old. He was first elected at 21 and comes from a political dynasty. His rise has been driven by his strong connections within the powerful Centrão bloc.

Gustavo Ribeiro: And Mário, what about Alcolumbre? He was once an outsider but has now solidified himself as a key power broker.

Mário Sérgio Lima: Alcolumbre started as a little-known senator but emerged as a key figure after securing the Senate presidency in 2019. Since then, he has consolidated immense influence, particularly over judicial appointments and budget allocations. His leadership will likely be more transactional than Pacheco’s, making it harder for Lula to rely on the Senate as a buffer against radical House initiatives.

Congressional Challenges for Lula

Gustavo Ribeiro: A key question from our audience: Could a hostile Congress turn on Lula the way it did with Dilma Rousseff?

Mário Sérgio Lima: Unlikely. Unlike Dilma, Lula has better political instincts and stronger approval ratings. Plus, his vice president, Geraldo Alckmin, doesn’t have the same congressional clout that Michel Temer had in 2016. However, if Lula’s popularity continues to decline and economic concerns grow, Congress may pressure him to forgo re-election in 2026.

Beatriz Rey: I agree. Impeachment requires severe congressional discontent, which isn’t the case yet. However, Lula must improve his legislative coordination, particularly with the Centrão.

The Future of Tax Reform and Social Media Regulation

Gustavo Ribeiro: Another audience question: Could Lula’s tax reform efforts face resistance?

Mário Sérgio Lima: Yes. While the first phase of the reform was approved, the second phase—focused on income tax—will be a battleground. The government wants to raise the income tax exemption threshold, but doing so would have significant fiscal implications. Expect corporate lobbying and congressional pushback.

Gustavo Ribeiro: And what about social media regulation? The government is considering new measures, but conservatives in Congress strongly oppose them.

Beatriz Rey: It will be extremely difficult for the government to pass such regulations in this Congress. Many lawmakers see this as government overreach and will resist any attempt to regulate digital platforms.

Closing Thoughts

Gustavo Ribeiro: To wrap up, what’s your outlook for Lula’s cabinet reshuffle?

Beatriz Rey: Ideally, it would involve giving key positions to lawmakers who can improve congressional negotiations. However, I don’t see the PT being willing to relinquish power, which may limit the effectiveness of the reshuffle.

Mário Sérgio Lima: I agree. The reshuffle won’t significantly boost Lula’s popularity, but it could help legislative negotiations. Ultimately, economic performance will be the main factor determining Lula’s approval ratings.

Gustavo Ribeiro: Thank you both for your insights. And to our listeners, remember to subscribe to The Brazilian Report for more in-depth analysis. See you next time!

Listen to other episodes