Brazil passes 20-year spending cap

The lower house approved the measure on Monday in a 366-111 vote, as the center-right president seeks to regain market confidence by implementing fresh austerity measures.

The constitutional amendment will see a limit to spending growth to inflation and still requires another round of votes in the lower house before it goes to the Senate.

"This is a clear sign of Congress' commitment to rebalance the fiscal account and rescue fiscal responsibility," said a spokesperson for Temer.

The vote was exceedingly tense, with insults exchanged between opposing sides. All attempts by the opposition to change the amendment were rejected by the lower house.

Victory for Temer

Temer, who took over the presidency after former running mate Dilma Rousseff was impeached amid accusations of corruption, has made it his mission to inject new life into the country's economy, as Brazil grapples with a contracting GDP and high levels of unemployment.

Temer has warned of an impending state "bankruptcy" if the government doesn't work to close a budget deficit likely to surpass 10 percent of the GDP this year.

The spending cap has been controversial, with critics arguing it will impose freezes on key sectors such as health and education, in a country used to lavish public spending.

Temer is also planning to submit an amendment that would reduce the benefits of the country's pension program.

blc/kl  (Reuters, AFP)