[5] Public spending and investments were limited to the same amounts spent in the previous year, adjusted for inflation[6][7] measured by the national Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo - IPCA).
[8] Both areas had a mandatory minimum spending limit corresponding to a percentage of the Union's Net Current Revenue (Receita Corrente Líquida - RCL) determined by the Federal Constitution.
[9][10][11] Critics of the measure claimed that the constitutional floors would fall over time if the revenue starts to grow more than inflation in the coming years.
[30][31] The text of the PEC established that if the cap is exceeded, triggers could be activated to contain: mandatory spending - such as public servants' salary freezing; adjustment of the minimum wage above inflation; creation or increase of aids, advantages, bonuses, allowances, representation funds or benefits of any kind in favor of public servants or military; other increases in mandatory expenditures.
However, the National Congress changed the text, forcing the government to send an Annual Appropriation Bill (Projeto de Lei Orçamentária Anual - PLOA) that does not exceed the ceiling, which makes it impossible to activate the triggers, because the branch or agencies could progressively reduce their non-mandatory expenses to accommodate the increase in mandatory spending, that is, until it eliminates the space for investments and costing, which would result, if the ceiling is not changed or extinguished, in the paralysis of the activity of the branch or agency, a situation that economists call shutdown.
[38] The Expenditure Cap Amendment has divided opinions and generated controversy among experts and activists linked to social movements.
According to Ricardo, if then-President Michel Temer did not have the courage to implement the PEC, Dilma Rousseff's impeachment process would be a pyrrhic victory.
[41] For the former director of the Central Bank, Alexandre Schwartsman, one of the positive points of the amendment is to force a discussion among governors about the breakdown of spending.
[42] Marcos Mendes, one of the formulators of the proposal and former head of the special advisory office of the Ministry of Finance, said it was essential to rebuild budget realism by balancing revenues and expenses.
In a public hearing in the Federal Senate, he argued that over the past few years, revenues have been systematically overestimated and expenses increased, which is why there have been billion-dollar spending contingencies.
[43] For the former secretary of Economic Policy of the Ministry of Finance Marcos Lisboa, the PEC 241, although insufficient to get the country out of the crisis, was an indispensable starting point on the path towards balance in public accounts.
[44] In Edmar Bacha's opinion, the long duration of the PEC would have a great effect on future expectations about the country, generating positive results in the short term.
[39] In a news article published by G1, most analysts consulted on the topic agreed that rejection of the proposal would worsen the economic scenario.
[46] The PEC would overload the courts and overburden public services in states and municipalities [47] and the Temer government was already thinking of passing another law to prevent lawsuits against the scrapping of health care.
[48] A survey by the Budget and Financial Inspection Consultancy stated that education would lose 24 billion reais per year with the measure.
[51] A survey by the Budget and Financial Inspection Consultancy stated that education would lose 24 billion reais per year with the measure.
[59] The Brazilian Society of Political Economy stated in a note that the PEC would worsen the economic situation of the country, expanding the inequality of access to opportunities to the poorest population.
[64] For Mauro Benevides Filho, the measure did not impose an effective control on expenses, since spendings on personnel and Social Security continued to grow, resulting in cuts in public investment.
[71] Intersyndicate Department of Statistics and Socioeconomic Studies (Departamento Intersindical de Estatística e Estudos Socioeconômicos - DIEESE) released a technical note criticizing the proposal.
In November it reached 172 occupied universities[87] and the Episcopal Conference of Brazil (Conferência Nacional dos Bispos do Brasil - CNBB) released a note in October 2016 stating that the PEC was unjust and selective.