March 27, 2016 / 3:49 PM / 2 years ago

Brazil's PMDB plans policies for new government if Rousseff is ousted: report

SAO PAULO (Reuters) - The Brazilian Democratic Movement Party (PMDB) is already working on policies including sweeping welfare cuts should their coalition partner President Dilma Rousseff be impeached and it formed the new government, a newspaper said on Sunday.

Brazil's President Dilma Rousseff arrives to a meeting with jurists at Planalto Palace in Brasilia, Brazil, March 22, 2016. REUTERS/Adriano Machado

Rousseff’s opponents want to impeach her over accusations that she manipulated government accounts. The PMBD leader, Vice President Michel Temer, would take over if she is ousted.

Many also blame Rousseff for sinking the economy into its worst recession in at least 25 years and mass protests were held against her this month in cities across Brazil. The political crisis has been compounded by a sweeping anti-corruption crackdown.

The PMDB, Brazil’s largest party, is considering changes in social benefits including a large housing program in a bid to cut spending and reestablish a fiscal equilibrium, said a report published by O Estado de S.Paulo.

“We are looking at measures that could benefit the population, but at the same time achieve fiscal balance and keep government accounts healthy,” Moreira Franco, a former minister under Rousseff, was quoted as saying. Franco is in charge of putting together possible actions, the report said.

Rousseff, who says she will not quit, is the latest leftist leader in Latin America to face upheaval as a decade-long commodities boom that fueled breakneck growth and social spending comes to an abrupt end.

One of the potential changes being considered by the PMDB concerns a large housing program called “Minha Casa, Minha Vida”, which is heavily subsidized by a federal fund (FGTS) which originally build to compensate workers who lose their jobs.

“This needs to be confronted before it becomes a huge problem... They (the government) are taking the FGTS to the limit,” Franco said, without giving further details.

Other possible measures include cuts to a program to finance college tuitions and the removal of tax exemptions in some industrial sectors.

The newspaper also said the PMDB was considering imposing limits on the “Bolsa Família”, a key social policy supported by Rousseff’s Worker party (PT) in recent years, whereby it would apply only to the poorest 10 percent who live on less than 1 dollar a day.

(This story has been refiled to fix headline)

Reporting by Marcelo Teixeira; Editing by Raissa Kasolowsky

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