With one year to go before the elections, political forces in Congress are recalibrating their strategies for 2026 in their dealings with the government. After the rejection of the provisional decree that would have replaced the Tax on Financial Transactions (IOF) and the dismissal of the center-right bloc-backed appointees in retaliation, congressional leaders now see the “game reset” and want to focus on the future.
With President Lula’s approval ratings recovering and key fiscal measures needing approval by year’s end, lawmakers are betting on a “pragmatic truce”—conditioned on the regular payment of parliamentary budget allocations and a change in tone from the Planalto Palace toward the Legislature.
Pressure on the government to comply with the fiscal framework is expected to test its ability to rebuild its congressional base as early as this week, when the economic measures package must be voted on. If confirmed, the truce could unlock crucial votes for implementing the 2025 Budget and planning for the election year.
To that end, Institutional Relations Minister Gleisi Hoffmann met with Lower House Speaker Hugo Motta and has also been holding meetings with parties such as the Progressive Party, Brazil Union, and Republicans, seeking to ease tensions and coordinate the political realignment.
Lawmakers say the “housecleaning” of the center-right bloc appointees affected the House, and leaders view rebuilding the governing coalition as an important step. These same lawmakers, however, expect the government to stop its public attacks on Congress. They cite, for example, the “embarrassment” caused to the Lower House speaker when Mr. Lula criticized, in his presence, the low level of Congress. After that remark, Mr. Motta said the government “must greatly improve” its relationship with lawmakers. “If the tone doesn’t change, there will be no reconciliation,” warned one centrist leader.
There is willingness in the Lower House to reshape agreements with the government—a process that will involve nominating new appointees and allocating budget funds. Lawmakers say Mr. Lula must empower Mr. Motta and give him the tools to strengthen his leadership in the House, particularly to ensure the release of funds.
Data from Siga Brasil show that of the R$50.3 billion reserved for parliamentary budget allocations in 2025, about R$30 billion has been committed—the first stage, when funds are earmarked for specific expenses. The amount actually paid totals R$17 billion, roughly 34% of the total.
That figure is considered low, given that there are only three months left in the year. According to one lawmaker from the Workers’ Party, it is “natural” for the government to hold off on payments amid uncertainty about revenue. But there is growing distrust among lawmakers, who face pressure from mayors to deliver local projects and fear that the government might not follow through on its commitments.
In this context, the government’s leader in the Lower House, Congressman José Guimarães, has emphasized the need for a clear pact on budget allocations. In a recent interview with Folha de S.Paulo, he said the government needs lawmakers’ votes to approve key bills—and for that, “it must open the coffers.”
In this realignment process, Mr. Motta is seen as a central figure, though some within the coalition still have reservations. The speaker is described as pragmatic but “unpredictable.” Although he recognizes the benefits of aligning with the government as Mr. Lula’s position strengthens, Mr. Motta has calibrated his moves according to his own electoral calculations in Paraíba and his bid for reelection as speaker.
One party leader points to his lack of resolve in sanctioning pro-Bolsonaro lawmakers—such as Eduardo Bolsonaro, whose expulsion request was shelved by the Ethics Council last week—as evidence of that unpredictability. “He’s very unstable,” the leader said. “When he’s thinking about the election in Paraíba, he leans one way; when he’s thinking about reelection as speaker, he leans the other. That’s why I’m not very optimistic about a closer alignment with the government.”
According to a senior opposition figure, Mr. Motta’s direction remains unclear, as his party, the Republicans, will not support Mr. Lula’s reelection next year. Yet, an early ally of Mr. Motta believes the speaker may move slightly closer to the government as the electoral process approaches.