Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 03BRASILIA3910, LULA'S PENSION REFORM PASSES. WHEN'S THE NEXT ONE?

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #03BRASILIA3910.
Reference ID Created Released Classification Origin
03BRASILIA3910 2003-12-12 18:54 2011-07-11 00:00 UNCLASSIFIED Embassy Brasilia
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 03 BRASILIA 003910 
 
SIPDIS 
 
NSC FOR DEMPSEY 
TREASURY FOR SSEGAL 
PLS PASS FED BOARD OF GOVERNORS FOR WILSON, ROBATAILLE 
USDA FOR U/S PENN, FAS/FAA/ITP/TERPSTRA 
USDOC FOR 4322/ITA/IEP/WH/OLAC-SC 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV EINV SOCI BR
SUBJECT:  LULA'S PENSION REFORM PASSES.  WHEN'S THE NEXT ONE? 
 
REF: (A) BRASILIA 3734, (B) BRASILIA 3684, (C) BRASILIA 3682 
 
1.  After seven-plus months of legislative tussle, Lula's 
pension-reform bill passed its required second Senate floor 
vote on December 11 by 51 votes to 24, two votes over the 
minimum 49 (three-fifths) required.  The twelve votes of 
opposition-party PSDB and PFL senators -- spurred by the 
fiscal self-interest of PSDB and PFL state governors -- were 
vital to the GoB's success.  Most of its Senate base voted 
obediently, with the predictable exception of a few PT 
radicals due to be expelled from the party this weekend. 
Later on December 11, the GoB's tax-reform bill in turn 
passed the first of two required Senate floor votes.  Lula 
is thus almost all the way towards meeting his top declared 
legislative twin goal for his first year in office. 
 
2.  An essential step in the pension-reform process was the 
GoB's agreement to introduce a parallel amendment embodying 
features on secondary issues (state-salary sub-ceiling 
levels; benefit and taxation limits on individual pensions, 
et al), arrived at in the latter stages of Senate debate but 
not incorporated into the main bill for reasons of 
procedural expediency.  The bill now awaits just formal 
promulgation in the `Diario do Congresso' to become law. 
Voting on the parallel amendment by Congress is due to start 
as early as Monday, December 15 but will not be completed 
before 2004. 
 
3.  Though the pension bill has been steadily watered down 
since June, this result remains Brazil's broadest pension- 
system reform since the 1988 Constitution.  Former president 
Fernando Enrique Cardoso contrived to introduce changes in 
Brazil's private-sector pension (INSS) system, but failed to 
make true inroads in reforming its public-sector pension 
fiscal disaster, whereby some three million retired civil 
servants have drained close to four percent of GDP from the 
GoB's Previdencia (Social Security Administration 
equivalent) budget in recent years.  By contrast, Lula's 
team took on public-sector-pension vested interests from the 
start, despite the PT's historical ties to those interests. 
The espousing and progress of pension reform under Lula's 
GoB was one of the latter's great confidence-builders for 
"the market." 
 
4.  Main changes introduced by the pension bill as passed: 
 
--  (i) current pensioners or survivors to start 
contributing 11 percent of their benefits above a defined 
floor towards the Previdencia system, starting next March; 
 
-- (ii) future pension ceiling for new public-sector 
employees of 2,400 Reals per month, the same as for private- 
sector social-security recipients (vs. the existing 
"integrality" principle that a public-sector pension equals 
top lifetime salary); 
 
--(iii) 30% cut in survivor benefits above 2,400 Reals per 
month, with immediate effect; 
 
-- (iv) public-sector workers already eligible to retire 
under previous rules with pensions equal to full salary will 
be exempted from the existing 11 percent Previdencia 
deduction from their salaries if they continue to work; 
 
--  (v) introduction of the principle of ceilings and sub- 
ceilings on public-sector salaries at all government levels; 
 
-- (vi) lengthening of the minimum requirements for current 
public servants to receive their "integral" salaries, to, 
e.g., minimum age of 60 (55 for women), time of service 35 
years (30), 20 years in public employment, of which at least 
10 in career specialty and five in last position. 
 
--(vii) current public functionaries who retire earlier than 
the new minimum age limits of 60 and 55 years to receive 
3.5% per year less pension if they take retirement before 
December 2005 or 5.0% less if after January 1, 2006. 
 
5.  The GoB projects that its new pension law will yield 
fiscal savings of fifty billion Reals, net present value, 
over the next couple of decades (albeit the methodology has 
never been convincingly laid out.)  Already in 2004, savings 
are meant to be of the order of 1.0 billion Reals from new 
taxation of public-sector retirees' pensions, plus 1.7 
billion Reals from taxing private-sector workers' salaries 
up to the raised ceiling of 2,400 Reals a month vs. the 
previous ceiling of 1,869 Reals.  Modest though this fiscal 
economy may seem, market interlocutors have consistently 
assured us that it meets their litmus test of "staunching 
Previdencia's budget bleeding" and leaves them content. 
 
6.  Meanwhile, however, an ugly new cloud has formed on 
Brazil's pension skyline.  Deficits on Previdencia's INSS 
(private-sector pension) side, which until 1995 was always 
in surplus, are rocketing up ever more steeply.  Indeed, the 
INSS deficit in 2004 will reportedly for the first time in 
history be larger, easily, than the public-sector pension 
system's notorious fiscal crater.  The 2002 INSS deficit, a 
nominal 18 billion Reals, accounted for only about a quarter 
of Previdencia's overall fiscal gap.  For 2003, though, INSS 
is projected to be 27.5 billion Reals in the red; for 2004, 
31.7 billion Reals, vs. a forecast 29.7 billion Reals for 
the public-sector side.  In other words, the 2004 increase 
in INSS's deficit will likely more than swallow up the 2.7 
billion Reals in savings that year which the GoB itself 
estimates its public-sector pension reform will bring, and 
so on for the indefinite future. 
 
7.  The following table illustrates the evolution of INSS 
yearly deficits according to official Previdencia Ministry 
data re-printed under a December 7 `Estado de Sao Paulo' 
headline "Hole in the INSS Will Require a New Reform Soon": 
 
1995 -- 0.46 billion Reals 
1996 -- 0.40 
1997 -- 4.57 
1998 -- 10.2 
1999 -- 12.8 
2000 -- 12.9 
2001 -- 15.2 
2002 -- 18.3 
2003 -- 27.2 
2004 -- 31.5 (estimated) 
 
(Embassy translation of the text of the `Estado de Sao 
Paulo' article being sent Septel.) 
 
COMMENT 
------- 
8.  This previously unpublicized trend towards giant INSS 
deficits on the private-sector side seems to hold somber 
implications for Lula.  First, the tangible if modest 
immediate savings from this year's pension reform which the 
GoB might have hoped to put towards social programs or 
investment in 2004-2005, have already evidently evaporated. 
Second, the rate of increase of the INSS deficit looks set 
to outstrip public-sector savings from the reform through 
the medium term, based on the GoB's own projections. 
 
9.  As the GoB reduced its pension-reform ambitions in the 
course of this year's legislative horse-trading, it became 
near-conventional wisdom that pension reform would need to 
be re-visited within, say, a half-dozen years.  The updated 
INSS arithmetic may pose the necessity for such re-visiting 
to take place in the medium, not long, term -- perhaps even 
during Lula's current administration, rather than the 
politically more palatable prospect of 2007/08.  Otherwise, 
market nerves over Brazil's fiscal prospects and debt 
sustainability could eventually re-commence to jangle. 
 
VIRDEN