Lula Signs 2026 Budget With Targeted Vetoes, Moves to Reclaim Funds From Expanded Amendments

Overview

• President Luiz Inácio Lula da Silva sanctioned the 2026 budget and vetoed R$ 393 million in parliamentary amendments, with the Casa Civil saying about R$ 11 billion tied to reclassified allocations will be blocked in the coming days.
• The government will reallocate R$ 7.7 billion to restore funding for programs such as Pé de Meia, Gás do Povo, Mais Médicos, PAC Saúde, Farmácia Popular, and the operation of federal universities and institutes.
• Another R$ 3.3 billion remains blocked to comply with the fiscal framework, as the Planalto argues the disputed discretionary funds are not formal amendments and points to Supreme Court limits on opaque allocation criteria.
• Congress had effectively lifted the amendments pool from R$ 49.9 billion to about R$ 61 billion by incorporating roughly R$ 11.393 billion of executive discretionary spending into lawmakers’ indications.
• Leaders from the Centrão and the opposition said they will work to overturn the veto in plenary, while the sanctioned budget totals R$ 6.5 trillion with a R$ 2.3 trillion spending limit and R$ 1.8 trillion for debt refinancing.