Brazil's Bolsonaro urges senators to pass pension reform, after amendment rejected

BRASILIA, Oct 2 (Reuters) - Brazilian President Jair Bolsonaro on Wednesday urged senators to approve his government’s pension reform bill, a day after they approved its basic text but rejected an amendment, a move that will reduce expected total savings by 76 billion reais ($18 billion).

The main text passed on Tuesday with a vote of 56 in favor - a comfortable margin above the 49 votes required - with 19 opposed and one abstention, but an amendment that would reduce year-end bonus salary payments to low-paid workers was rejected.

Overhauling the costly social security system is the number one item on Bolsonaro’s economic reform agenda. Senators will resume debate on Wednesday, with the aim of moving it to a second-round and final vote next week.

“Reform is necessary. If it doesn’t come, Brazil will be bankrupt in two years. Sorry, you have to approve it, there’s no alternative,” Bolsonaro said as he left the Alvorada Palace in Brasilia, according to a video posted on the his Facebook page.

“There is no plan B ... other governments have tried to do it, but failed. That’s the reality.”

Via a mix of unpopular measures like raising the minimum retirement age and increasing workers’ pension contributions, the bill aims to save the public purse just over 900 billion reais over the next decade.

This defeat for the government late on Tuesday will shave 76 billion reais off that. Senators will debate other amendments to the bill on Wednesday before it heads to a second-round vote, a legal requirement as the bill amends the country’s constitution.

The head of Bolsonaro’s political party in the Senate, Senator Major Olimpio, warned on Tuesday that the second-round vote scheduled for next week may not take place if the government reneges on promises made to lawmakers in return for their support.

The government, central bank and many economists insist pension reform is needed to boost confidence, investment and ultimately economic growth.

($1 = 4.15 reais)

Reporting Jamie McGeever and Pedro Fonseca Editing by Nick Zieminski