BRASILIA, (Reuters) – Brazil’s lower house of Congress approved yesterday a government proposal for just a small hike in the minimum wage, handing President Dilma Rousseff her first major legislative victory.
A bigger rise, as sought by labor unions, could have derailed Rousseff’s drive to rein in public spending and tame inflation that hit a six-year high near 6 percent last year as the economy boomed.
The government last week announced $30 billion in budget cuts for 2011.
Rousseff might come under growing pressure to backtrack on some of those cuts and has already signaled she may fall short of pledges for sweeping economic reform.
The Chamber of Deputies approved a government bill to increase the national minimum wage to 545 reais ($326) a month from 510 reaias ($305), rejecting amendments backed by union leaders for much larger increases.
The Senate is likely to approve the bill next week.
In theory, the government holds a comfortable majority in both houses of Congress. But due to weak party loyalty, it has had to cajole and court coalition members, including its own labor minister.
