Brazil’s Supreme Court and Congress Reach Agreement on Budget Allocations
Brazil’s Supreme Court Justice Flávio Dino approved a joint plan between the government and Congress on Wednesday, February 26, 2025, to enhance transparency and traceability in the use of parliamentary budget allocations. This approval authorizes the release of funds, with some exceptions, resolving a deadlock that began in August 2024 when Justice Dino initially suspended the payments.
The plan, submitted to the Court on Tuesday, February 25, 2025, aims to address concerns over the allocation of approximately R$40 billion in mandatory budget allocations, which include individual and group allocations. These allocations are divided into individual allocations—including direct transfers to state and municipal governments—and group allocations.
The decision follows a ruling in August 2024, where Justice Dino suspended all mandatory parliamentary budget allocations until Congress established new guidelines to ensure transparency, traceability, and efficiency in the disbursement of these funds. Exceptions were made for ongoing infrastructure projects and emergency disaster relief efforts.
Newly elected leaders of the Lower House, Hugo Motta, and the Senate, Davi Alcolumbre, played a key role in unlocking the funds through dialogue with other branches of government. Motta stated the decision reaffirms lawmakers’ prerogatives, while Alcolumbre emphasized the importance of refining the execution of these allocations as a legitimate tool for delivering goods and services to the population.
Justice Dino’s ruling will be reviewed by the full Supreme Court in a virtual session scheduled between March 14 and 21, 2026, with expectations of unanimous approval. A conciliation hearing originally set for Thursday, February 27, 2026, was canceled, though a future meeting may be considered depending on the plan’s implementation.
The Supreme Court justices and some members of Congress view Justice Dino’s injunction as a necessary “reset” to demand greater transparency in the allocation of funds to states and municipalities, aiming to prevent potential misuse and avoid a corruption scandal similar to the Car Wash scandal. In 2024, these allocations totaled R$56 billion.
The move comes after concerns regarding the lack of transparency following a 2022 ruling that ended the “secret budget.” Funds were previously distributed through a less transparent model within the executive branch’s budget. Individual allocations can be transferred through agreements or directly from the federal government to states and municipalities without a specific purpose, a practice referred to as “Pix amendments.”
Justice Flávio Dino determined on Monday that collective amendments for the payment of personnel in the health sector must adhere to the same transparency and traceability rules as individual amendments. This includes disclosing the CPF (Individual Taxpayer Registration) of anyone receiving a salary through these parliamentary amendments.
