Brazil's Rousseff ups social spending as Senate ruling looms

SAO PAULO (Reuters) - Brazil’s beleaguered President Dilma Rousseff on Sunday vowed to raise spending on her party’s signature anti-poverty program in an appeal to her political base, warning that her opponents would slash social expenditure if she is stripped of office.

Brazilian President Dilma Rousseff reacts as she attends a ceremony marking the extension of the Programa Mais Medicos (Program More Doctors), at the Planalto Palace in Brasilia, Brazil April 29, 2016. REUTERS/Ueslei Marcelino

Left-leaning Rousseff, speaking at a Labor Day rally in the industrial heartland of São Paulo, said her ouster by the Senate next month would open room for a dismantling of labor rules that protect millions of workers in Latin America’s largest economy.

A Senate committee is discussing whether to accept a request by the lower house to put Rousseff on trial for allegedly breaking budgetary rules.

If a majority of the 81-seat Senate votes to do so, as expected, Rousseff could be suspended from office as soon as May 11 and her vice president will take over.

Recent polls show that a clear majority of senators favor putting Rousseff on trial for using state banks to fund government programs - an offense that violates Brazil’s fiscal responsibility law.

With close aides admitting her suspension looks likely, Rousseff has launched a wave of announcements that appeal to voters of her Workers Party.

On Sunday, she announced an average 9 percent increase in the Bolsa Family cash transfer program and promised a new wave of public housing.

The moves follows data last week that showed tumbling tax revenues led to a widening of the budget deficit in March.

“They are saying this government is finished. They are trying to paralyze us, but the government is doing its part,” Rousseff said. She repeated her allegations that there was no legal basis for her dismissal.

“This is not only a coup against a democratically elected government, but also a coup against the hard-won rights of the workers of this country.”

Brazil’s Supreme Court has rejected government injunctions against the impeachment process.

Rousseff said her opponents, in addition to loosening labor legislation, planned to weaken social programs that have helped keep the Workers Party in power since 2003.

Senior figures in Vice President Michel Temer’s PMDB party have said that if he takes office next month his government would maintain Bolsa Familia and other welfare programs.

Businesses have for decades complained about Brazil’s labor code for excessively raising the cost of hiring and stimulating unnecessary litigation between employers and workers.

Newspapers have reported that Temer would be willing to revise some aspects of the legislation to resuscitate an economy braced for a second straight year of contraction.

Temer told SBT channel on Thursday that, if Rousseff were impeached, his administration would make job creation a priority.

Reporting by Guillermo Parra-Bernal and Lisandra Paraguassu; Editing by Alan Crosby and Andrew Hay