Brazil Pays Lawmakers’ Earmarks on Time While Starving Federal Regulators

How Brazil's 2026 Budget Cut Regulators While Protecting Lawmakers' Earmarks

Brazil's federal regulators set rules and prices for much of daily economic life: energy tariffs, health plan adjustments, flight safety, fuel quality and infrastructure concessions. To perform that role, they need two conditions: directors appointed for technical competence with fixed mandates and autonomy, and a budget that is sufficient and predictable. Neither condition is currently being met, according to an analysis of the 2026 budget by O Globo.

The 2026 Budget Guidelines Law included an annex of protected spending items. Congress had placed regulatory and inspection spending in that list, but the president vetoed the section in December, and the agencies' provision remains vetoed. Five months later, the government cut. Anac announced a 40% reduction in inspection activity and suspended pilot certification tests over a R$24 million shortfall; the agency remained excluded from July's budget unblocking. ANP, which until last year had a single device to measure biodiesel content in the field, now has seven — five supplied by the market it regulates — for more than 40,000 fuel stations. CVM collected R$2.1 billion in inspection fees between 2022 and 2024 but received only R$670 million in budget.

The contrast is not with scarcity elsewhere. The 2026 budget reserves R$61 billion for parliamentary earmarks; a single senator has about R$74 million in individual amendments. The National Water Agency, which monitors rivers and dam safety, received R$44.9 million. Constitutional amendments approved by Congress in 2015 and 2019 made individual and bench earmarks mandatory spending, without presidential sanction, while agency budgets became discretionary and can be cut by decree.

What the 2026 numbers reveal, the piece argues, is not disorganization but a pattern: spending that benefits lawmakers is paid on time and protected, while spending that protects citizens and investors is cut without warning. It points to the LDO requirement that 65% of Pix amendments and health transfers be paid by June 30, the eve of the campaign season, and to the Federal Court of Accounts' finding that 81% of examined transfers cannot be traced from author to final beneficiary.

The Pattern Behind Starved Anac, ANP and CVM Budgets

Congress Gave Its Own Earmarks Constitutional Protection, Not the Regulators

The obligatoriness of individual and bench amendments was inscribed in the Constitution by parliamentary initiative in 2015 and 2019, with no presidential sanction. The effect is that a senator's individual amendment of about R$74 million is harder to cut than ANP, Anac or CVM operating funds. The original justification was to end vote-for-cash release of funds, but the article argues the exchange has not ended — it has changed currency: the money became protected, and technical directorships became negotiable positions.

What the Numbers Show at Anac, ANP and CVM

Anac's R$24 million gap translates directly into fewer inspectors and a halt to pilot certification tests. ANP's field enforcement capacity for biodiesel content is strikingly thin: seven meters for more than 40,000 posts, with five supplied by the industry under its oversight. CVM's case is a specific example of fiscal inversion: it generates R$2.1 billion in fees while receiving only R$670 million in budget. The result is a regulatory state that can charge the market but cannot pay for its own oversight.

The Cost of a Weaker Regulatory State Falls on Contracts and Concessions

This is the central argument: a state that cuts its regulatory capacity does not become smaller; it becomes more expensive. Contracts lose predictability, concessions lose a credible arbiter, and investment becomes more costly because of political risk. Regulation is politically thankless, the piece argues, and is always the first spending to fall. But replacing it later costs more than the budget line that was cut.

What the Funding Gap Means for Regulated Sectors and Consumers

For businesses and professionals with direct regulatory exposure, the budget arithmetic points to specific pressure points:

• Aviation operators and pilot candidates: Anac has already suspended pilot certification tests and cut inspection activity by 40% over a R$24 million shortfall. Confirm scheduled exams and airworthiness inspections directly with Anac before assuming existing timelines will hold.
• Fuel and biodiesel market participants: ANP has only seven devices to measure biodiesel content at more than 40,000 fuel stations. Expect enforcement to lean on documentary audits rather than field testing until more equipment is funded.
• Investors in concessions and regulated infrastructure: The current framework leaves agency budgets subject to presidential decree even after congressional approval, and the Federal Court of Accounts found 81% of examined transfers untraceable. Price this regulatory unpredictability into long-term contracts and concession bids.
• Consumers and health plan policyholders: Agencies responsible for tariffs and health plan adjustments are among the discretionary items whose spending was vetoed. Delays in rulemaking and inspection are therefore likely to show up as slower enforcement of tariff, safety and health plan complaints.