Brazil’s Impeachment Drama

The vote is part of a growing regional swing against left-wing populism.

By Mary Anastasia O’Grady


Sunday’s special session of the lower house of the Brazilian Congress was a raucous affair as it met to vote on a motion to impeach President Dilma Rousseff of the Workers’ Party (PT). She is accused of using loans from state-owned banks to cover up a budget deficit her government created in violation of the Brazilian Constitution’s fiscal-responsibility law. After more than nine hours the motion won the 342 votes needed to pass.

Ms. Rousseff’s defenders said that it was a purely political attack by adversaries who are as corrupt as she is. In fact, her problems go much deeper.

With a constitution that gives the government almost unlimited power to intervene in the economy, it is hardly surprising that Brazil’s political system is riddled with conflicts of interest. But if this were a case of routine graft, Ms. Rousseff would likely have had success in her attempt to lure representatives from smaller parties to her side. As it stands, even if she had survived this vote, there are at least seven other impeachment petitions that will follow.

Brazil’s Congress is legendary for its lack of party discipline, and only three weeks ago it was widely believed that Ms. Rousseff could defeat the impeachment motion by offering lucrative posts in her government to opposition congressmen. But she wasn’t counting on the swelling wave of popular outrage against the PT machine.

This vote was a national referendum on the PT effort to bring bolivarianism—both its socialist economics and its political absolutism—to Brazil. It’s why House Speaker Eduardo Cunha scheduled the session on a Sunday. The nation was watching on television as each deputy voted on camera.

Even before the votes were counted, there were reports that the pro-impeachment side had the two-thirds majority necessary to prevail. The final result is evidence of the strong anti-Rousseff sentiment across the nation.

The petition now moves to the Senate which will decide with two simple-majority votes whether to suspend her and then set up an impeachment tribunal. After that a two-thirds majority vote in the Senate is needed to remove her from office. If she ultimately were cleared, Ms. Rousseff would resume her role as president, but during her suspension Vice President Michel Temer of the Brazilian Movement for Democracy Party would be in charge.

Ms. Rousseff only narrowly won re-election in October 2014 in a runoff against Brazilian Social Democratic Party candidate Aécio Neves. She pulled out that victory by using the power of her incumbency to ramp up the PT’s signature populism, particularly in the poor north of the country. But that year the economy did not grow at all. Last year gross domestic product contracted 3.8%. This year it is forecast to shrink again by at least 3%.

The pain is self-inflicted. The PT’s increasing protectionism and control over the economy badly damaged investment flows. Worse, government profligacy and money printing are expected to drive inflation—a tax that hits the poor the hardest—to 10% this year. That’s unacceptable to a nation that still remembers the hyperinflation of the early 1990s.

The fiscal-responsibility law was designed to ensure that reckless government spending could not happen again. So the charge that Ms. Rousseff violated that important law to cover up her populist spending binge with loans from government banks leaves many Brazilians feeling that she defrauded them.

A middle class that benefited from the stability of the Brazilian real after 1999 and was beginning to believe that Brazil had left tropical populism behind is outraged. If it is blaming the party at the helm this is hardly a political conspiracy.

Brazilians are now part of a regional backlash against the leftist ideas of the Foro de São Paulo, a Latin American conference founded in 1990 by former President Lula da Silva, Ms. Rousseff’s predecessor and mentor, to coordinate Marxist movements in the post-Soviet world.

Ms. Rousseff is fighting for her political life because her alleged constitutional violations were part of the PT’s strategy to use state resources to consolidate power in the spirit of Hugo Chávez’s Venezuela, Evo Morales’s Bolivia and Rafael Correa’s Ecuador.

Even at the outset of the regional swing to the left it wasn’t easy to sway Brazilians in that direction.

The nation still carries the psychological scars of the 1964-85 military government. Civil society is a rich mosaic of legal, trade and agricultural associations and media and religious groups that jealously guard free speech, civil liberties and institutional independence.

Economic freedom may be constrained by a large regulatory state. But the productive sector is free to accumulate resources by way of voluntary transactions in the market, which means that it has political independence and the motivation to protect it.

Lula and Dilma are great admirers of Fidel Castro and they have used the Brazilian state to promote the Cuban model throughout the hemisphere. But at home, as these impeachment proceedings demonstrate, Brazilians are having none of it.

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