The decision of the Chamber of Deputies and the Senate to reject the presidential decree regarding the increase in the Tax on Financial Transactions (IOF) demonstrated a complete shift in Congress toward an outright break with the government. It rejected a timid measure, indicating that it will not accept any taxation or tax on the wealthiest sectors of society. Dominated by the Centrão (an opportunistic right wing political bloc in the Congress, that is known by its clientelistic politics) and the far right, Congress reveals its nature in this dispute: a house fueled by clientelism, a direct agent for the interests of the bourgeoisie, led by rentier interests and agribusiness.

In this context, the presidents of the Chamber and the Senate acted to impose this defeat on the government. At the same time, they showed that there is an inclination among these political sectors to move toward a more conservative opposition line against the Lula government, despite the fact that many of these sectors are part of the government.

This dynamic indicates that there is a preparation within these sectors to position São Paulo’s current governor, Tarcísio de Freitas (Republicans), as the priority candidate for the bourgeoisie, supported by banks, large landowners, and predatory entities such as large financial corporations and mining companies – the collusion of Banks, Billionaires, Cattle, Big Techs, and Bets. It is an option that looks favorably at Milei’s plan—a purer neoliberalism, with no concessions, no conciliatory discourse, but rather a more direct confrontation against popular interests and the rights of the people.

What has yet to be resolved is the weight of bolsonarism in this ticket. However, there is an evident interest in reducing this weight, even though Bolsonaro is still making an effort to be part of this composition, giving it a more reactionary aspect, although Tarcísio’s candidacy alone already encompasses the most reactionary interests in Brazilian society.

This path is paved by Lula’s declining popularity and the weakening of “hard bolsonarism”: the imprisonment and escape of Zambelli, and the holding of an extremely weak event – the weakest in many years – last Sunday on Avenida Paulista. This explains what has occurred in Congress over the last few days. A new political conjuncture is opening up, and it is necessary to intervene, starting with the call to the streets on July 10.

The government’s politics

The novelty of the situation is that, for the first time, the Lula government is choosing to confront the Congress’s policies, pushed by the Centrão. In these two and a half years, the government has centered on a line of collaboration with Congress, partnership, and concessions, without waging any political struggle against those who dominate it. Lula has already missed an opportunity by “cooking” the confrontation with bolsonarism after January 8, not developing a consistent struggle around “no amnesty.” Tragically, an important part of the government supporters voted for the expansion of the number of lawmakers alongside the conservative right.

Now, there are indications of questioning this approach, including a call made by Guilherme Boulos – clearly an orientation that came from the core of the government – to hold a rally against Congress on July 10. On social media, a broad campaign has also involved the PT leadership. Denouncing Congress as a corrupt and parasitic house is important, as is naming the banks and billionaires as responsible for the adjustment and the glaring inequality that marks Brazil in 2025.

On the other hand, it cannot be accepted that the adjustment be paid for by the poorest, as is the case with the BPC (Continuous Payment Benefit, destined to people with disabilities, elderly people and people with low income) with attacks on education, rising interest rates, and the more general framework of austerity from the economic team.

The socialist left needs to act in this new political situation, focusing on confronting Congress, denouncing its nature, and defending a program of agitation that strikes hard at the super-rich and contends in the streets for what may start in the protests on the 10th.

A Congress that is an enemy of the working people

Our next central task will therefore be to call for the July 10th activity against Congress, the enemy of the people. We will expose what this Congress has done as an agent of the bourgeoisie, such as in the approval of the increased number of deputies. This shows that it is a Congress focused solely on maintaining privileges and defending the rich.

Not to mention the benefits and privileges of high salaries, while the majority of the people earn a minimum wage, have their pensions confiscated, and suffer from rising food prices. A Congress that has captured part of the public budget, through the scandalous means of amendments that PSOL has rightly denounced and which are based on various distortions of popular will. A caste that lives at the expense of the majority of the people, focused on reproducing its own mandates and serving as better servants of the rich across the board.

At the same time, we call on the government to be consistent in confronting the Centrão. Lula should break his agreements with those who have stabbed him in the back and will continue to do so: call for a national TV broadcast to speak plainly, dismiss ministers appointed by the Centrão, defend a program of measures like taxing the great fortunes, apply the promises regarding exemption from income tax, and ensure that the battle against the 6×1 scale can truly be effective.

Our program

We will mobilize in the streets and on social media with a simple but direct program, standing alongside the people in this struggle. A program that taxes the wealthiest, pressures for interest rate reductions, audits public debt payments, and shows society who benefits from rising interest rates and public debt. It demands dividends and profits. In the United States, the tax rate is 40% on dividends and profits. Here, there is no such taxation, nor on great fortunes. We must demand from the government clear projects and discuss their necessity with society to effectively achieve income distribution.

At the same time, our position as an independent project must continue mobilizing against the adjustment measures that the government itself has carried out, unfortunately, against popular interests, such as the drafting of the fiscal framework proposed by the federal government and approved by Congress, with the only exception being PSOL’s contrary vote. This fiscal framework leads to constant attempts to reduce the constitutional ceiling on investments in education and health, alongside pressures from the bourgeoisie to reduce benefits, Bolsa Família, etc. Pressures that, in the case of the Continuous Payment Benefit (BPC), the government has proposed and implemented significant cuts. This cannot continue. It is necessary to confront the bourgeoisie, and the government cannot attack the working class if it genuinely wants to confront it.

There also needs to be a price control policy on food, which is another burden on the workers’ budgets.

A genuine change of course is required. A confrontation against Congress means a clear proposition in favor of the people’s interests. With an end to the fiscal framework and a withdrawal of proposals for cuts in education and social benefits, as presented in MP 1303/25 and Decree 12534/25.

It is essential to continue monitoring this situation to know if the government will pursue this struggle, if it will genuinely be consistent in it or if it will reconcile as it has done. Regardless of the government’s next steps, there needs to be a policy that asserts the necessity of this confrontation and that leads the process of mobilization.

We will join PSOL with an independent column at the July 10 event, and will certainly be at the forefront in defending popular interests, which is why we are also promoting the Manifesto in Defense of Education, signed by a number of educators, including the president of Andes, and organizations leading the movement, such as parts of SEPE (Union of Teachers of the State of Rio de Janeiro) in Rio de Janeiro, APEOESP (Union of Teachers of the State of São Paulo), Andes (National Union of Universities Professors), and the trade union movement defending education against cuts and adjustments.

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