Brazil's lower house to cut life span of bill that increases spending cap

BRASILIA (Reuters) - Brazilian lawmakers reached an agreement on Tuesday to cut the length of a proposal to expand the country's spending cap to fund social welfare payments, said congressman Claudio Cajado.

The constitutional amendment, if approved by the lower house, would raise the spending cap by some 145 billion reais ($27.84 billion) for only one year, instead of the previously planned two-year period, Cajado told journalists after a meeting wuseith Congress leaders.

The bill, pushed by President-elect Luiz Inacio Lula da Silva, aims to cover payments of 600 reais a month to poor families under the Bolsa Familia welfare program. It also excludes from the cap the spending of 23 billion reais of windfall revenue on public investment.

The expectation is that the proposal will be approved by the lower house in a vote later on Tuesday, said Cajado.

Initially, the proposal planned to waive 175 billion reais from the spending cap for each of the four years of Lula's presidential term, but it was trimmed down when it was approved by the Senate earlier this month.

With the changes, the proposal will have to return to the Senate for a second vote after it passes the lower house.

However, a new vote in the Senate on Tuesday is not ruled out, said Senator Marcelo Castro, the point man for next year's budget.

($1 = 5.2082 reais)

(Reporting by Lisandra Paraguassu in Brasilia; Editing by Matthew Lewis)