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Brazil's Senate begins final debate on spending cap

BRASILIA, Dec 13 (Reuters) - Brazilian senators began a final debate session on Tuesday over a 20-year public spending cap proposed by President Michel Temer to control a ballooning budget deficit, a crucial step in his plan to rescue Brazil’s stalled economy.

The Senate is expected to approve the spending ceiling by a wide margin, though leftist opponents of the austerity measure have sought to delay the vote as long as possible.

Authorities braced for protests outside Brazil’s Congress organized by labor unions and left-wing groups opposed to cutbacks they say undermine education and health services that will hurt Brazil’s poor.

Police frisked young men and women as they arrived at the ministry-lined esplanade of Brasilia and seized pen knives, slings and marbles used by protesters to unbalance police horses.

The unpopular constitutional amendment limits the growth of federal government spending to the rate of inflation for 20 years, with a presidential review after a decade. It cleared the Senate in a 61-14 vote in the first of two votes on Nov. 29.

Temer’s economic team headed by Finance Minister Henrique Meirelles has called on the country to back the spending cap, saying it is vital to putting overdrawn government accounts in order and improving Brazil’s investment grade credit rating.

A new Datafolha poll on Tuesday showed that 60 percent of Brazilians are against the spending cap. The survey published by the Folha de S.Paulo newspaper said opposition was strongest among young people, those with higher education and lower-income Brazilians, while the rich tended to support it.

Temer’s government has also sent Congress a proposal to reform Brazil’s costly pension system, without which economists say the spending cap will not by itself restore fiscal balance.

Pension reform is expected to face fierce opposition next year as unemployment rises and the country’s worst slump since the 1930s Great Depression threatens to stretch into a third year. (Reporting by Anthony Boadle; Editing by Jeffrey Benkoe)