18 de noviembre de 2015 / 2:17 / en 2 años

UPDATE 2-Brazil Congress upholds vetoes to avert spending hike

(Recast with new vote; adds analyst comment, fiscal plan details)

By Alonso Soto and Leonardo Goy

BRASILIA, Nov 18 (Reuters) - Brazil's Congress upheld President Dilma Rousseff's vetoes of two bills to raise public spending, in a victory for the leftist leader as she tries to close a gaping fiscal deficit and regain investors' confidence.

Opposition lawmakers failed to reach the absolute majority needed to override a veto on a bill to raise benefit payments to retirees on Wednesday afternoon. Congress late on Tuesday held another veto to avoid steep wage hikes for judiciary employees.

The two bills would have cost the administration 47 billion reais ($12.43 billion) in extra expenditures over four years, according to finance ministry data.

Maintaining the vetoes gives a reprieve to Rousseff, who is scrambling to shore up the country's finances to avoid deepening what is expected to be the worst economic crisis since Brazil defeated hyperinflation in the early 1990s.

Still, her narrow victory in Congress does not mean the leftist leader will have enough political support to pass a controversial fiscal savings package calling for increased taxes and reduced public spending.

"Though positive news for the administration, the vote's narrow margin underscores anemic support in Congress for the fiscal adjustment," Cameron Combs, a researcher with Eurasia Group said in a note.

The opposition nearly reached the 257 votes it needed late on Tuesday to override the veto on wage hikes.

Rousseff needs three-fifths or 308 votes in the Lower House to amend the constitution and revive a financial transaction tax, known as CMPF, which represents nearly half of the austerity package worth 65 billion reais.

Widening budget gaps and surging debt levels led Standard & Poor's to strip Brazil of its investment-grade rating in September. Policymakers are scrambling to prevent rival agencies from following suit, which could spark capital flight from the former Wall Street darling.

Rousseff's popularity was stuck in single digits in recent polls, following a massive corruption investigation involving her Workers' Party and coalition partners.

$1 = 3.7825 Brazilian reais Reporting by Leonardo Goy; Writing by Reese Ewing and Alonso Soto; editing by Sandra Maler, Bernard Orr

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