TC opens doors for congressmen to pass laws that generate spending

constitutional Court interpreted the article 79 Political Constitution of Peru (CPP) and thereby gave congressmen free rein to create legislative drafts capable of spentsomething prohibited by the same statute.

According to the CPP, “representatives before Congress they have no initiative to create or increase expenditures other than those related to their budget”; therefore, the voter is always warned not to believe the proposals of a congressional candidate when he promises a job.

What does CT say?

For him Constitutional Court, Section 79 “does not prevent a legislative initiative submitted by members of Congress from providing a legal source so that subsequently and within its powers the executive branch determines or considers the inclusion of the necessary provisions in the annual budget law to meet the costs that ultimately will require its materialization.

Simply put, the spending initiative put forward by a congressman is prohibited only if you intend to change the current budget, but not next year or years.

Redistribution of money and possible tax adjustment, will these be the risks of the decision?

David Tuesta, former Economy and Finance Minister, used his Twitter account to criticize the decision. “All the powers of the state in Peru have been seized by the worst populism. The decision of the Constitutional Court is scandalous. They have just given Congress a free hand. Fitch did not make a mistake by lowering the outlook to negative. Bad bad”.

And it is that a new interpretation could lead to reallocation of resources in line with legislators, at the risk of forfeiture or budget cuts to sectors that really need it. In addition, by creating a gap, it is not precluded from adjusting taxes in order to generate more revenue and meet the obligations generated by parliamentary proposals.

“If the legislature passes a rule that means more spending in the future, the government in power that follows the fiscal rule will be forced to cut resources to sectors that are suddenly in need of money, but that they will have to allocate money or perhaps contribute tax adjustment to close the gap,” Tuesta warned.

Is there a reverse?

For the former minister, the last decision before the promulgation of the norm, taken by the executive branch, is unlikely to be able to block the spending initiative, since the NC, which is the highest body, “gave him back”constitutional lawyer Victorhugo Montoya agreed with the latter.

“The verdict has the quality that has entered into legal force, so it can no longer be changed. There are always procedural alternatives, for example, clarification in order to better explain this or that argument, or for the TC to change its position and explain better what it argued,” the specialist said.

While the TC has provided several justifications in two sentences, it supports the interpretation; does not satisfy “constitutional filters”.

For example, although the organization believes that preventing congressmen from spending money limits the protection of citizens’ rights, “it has forgotten who controls the public finances” who knows where the money is needed and how it will be spent in the future, as current expenses.