Brazil's ruling party loses control of Congress

Published: 9:56PM Tuesday February 03, 2009 Source: Reuters

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Brazilian President Luiz Inacio Lula da Silva's leftist Workers' Party (PT) lost control of Congress to a centrist partner in Brazil's ruling coalition.

The reversal could hinder Lula's ability to push through his legislative agenda in the remainder of his second four-year term, which ends in December of 2010.

Senator Jose Sarney, a former president of Brazil and leader of the Brazilian Democratic Movement Party (PMDB), was elected president of the Senate, defeating PT candidate Senator Tiao Viana by 49 to 32 votes.

Michel Temer, also of the PMDB, Brazil's largest political party, was elected speaker of the lower Chamber of Deputies, with 304 of the 509 votes cast.

Temer becomes Brazil's third-ranking official, after Lula and his vice-president Jose Alencar, whose health is fragile and remains in hospital after abdominal cancer surgery.

In his first address, Temer told the deputies they should be prepared to take unpopular measures to deal with an economic downturn.

"It will be a complicated two years," Temer said.

Concerned that a slowing economy could damage his party's ability to win the presidential election in October 2010, Lula has granted tax breaks and extended credit lines to consumers and companies. Economic growth is expected to slow to near 2% this year from over 5% last year.

The PT controlled the Chamber until now, but as part of a 2007 agreement with the PMDB it did not put up a candidate for speaker in this election. The PMDB holds the largest number of seats in both houses.

After the PT's worse-than-expected showing in local elections last October, the PMDB sought more power and decided to bid for the Senate leadership as well.

The leaders of the Chamber and Senate are instrumental in setting the legislative agenda in Congress.

Political analysts say it may now become more costly for Lula to have his proposals approved in Congress, as the PMDB will demand more government posts and more spending in cities and states it controls.

Sarney, 78, a veteran politician, was president of Brazil from 1985 to 1990 and has been a senator since then.

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