Brasilia - Targeted by frequent budget cuts, the 11 federal regulatory agencies — which are linked to the Executive branch — have decided to escalate their rhetoric against the government itself and are mobilizing in a campaign to protect their funds, in a cry for help against the deterioration of structures and even the paralysis of services and inspections.
On the radar, the agencies are already working to overturn a veto by President Luiz Inácio Lula da Silva (PT) on a provision of the 2026 Budget Guidelines Law (LDO), which prevented the government from blocking the budget of these agencies (there is still no date set for the vote). And they have begun to mobilize to support four recent bills that guarantee financial and administrative autonomy for the autonomous agencies.
Throughout last year, the federal government had already frozen approximately R$ 1 billion from the agencies' budgets, representing a 20% block on the resources initially approved for these bodies. Then, in March 2026, a first presidential decree froze R$ 84.6 million from two agencies: ANS (supplementary health) and ANTT (road and rail transport).
“The funds that should be transferred to the agencies have been blocked for tax purposes. And this has been happening sequentially, but it has reached an irritating level for their operation,” Leonardo Góes, the current director-president of the National Water and Sanitation Agency (ANA), told NeoFeed . “The agencies are not vassals of the government in power, they are state bodies.”
Read the article: The illegal budget cuts that compromise Brazil.
Góes acknowledges that the election calendar makes budget restructuring difficult. At the same time, he believes that the scenario opens up space for an institutional movement by lobbying agencies targeting the presidential candidates.
On the agenda are the restructuring of its staff and a budget free from cuts by governments, amidst a growing increase in infrastructure concessions and essential services.
In the case of ANA alone, its CEO reveals that contracts and agreements have already been suspended, which directly affects the agency's ability to monitor whether concessionaires are meeting investment and construction targets, for example.
The agency's budget in 2020, the year it also began overseeing the sanitation sector following the sector's legal framework, was R$ 341 million, but it has already fallen to R$ 142 million in 2026.
The president of the Brazilian Association of Regulatory Agencies (Abar), Vinícius Fuzeira, points out that between 2023 and 2025, the agencies accumulated 20 open director positions, due to a lack of government nominations or because the nominations were stalled in the Senate for months. In his view, this situation "weakens the agencies too much" and generates significant legal uncertainty in a general context.
In addition to the recent operational shutdown, the agencies also complain about not having autonomy over the collection of fines and fees they charge the private sector for inspections, for example. Part of it stays with the agencies, but another part is always retained by the National Treasury through budget contingency decrees.
“When you [the government] start taking resources away from the agency to generate a primary surplus, to pay off debt, they end up struggling. On average, the agencies are currently operating with a 30% staff shortage,” says the president of the organization.
“This year the president [Lula] vetoed everything that was necessary for the agencies to function, and we're back to all the suffering. And now we're battling to overturn the veto [on the Budget], but that depends on the political climate, and the agencies are always the ugly duckling.”
A recent study by FGV (Fundação Getúlio Vargas) indicated that, between 2010 and 2022, federal regulatory agencies collected R$ 179 billion, but retained only R$ 74 billion after consecutive budget cuts by the government. "And this situation only worsened last year. We are extremely concerned about this," says Fuzeira.
Regulatory pressure
At the end of April this year, at a dinner hosted by the Parliamentary Front for a Competitive Brazil, directors from virtually all Brazilian regulatory agencies were categorical in reinforcing that budget restrictions are already limiting their constitutional role. These agencies oversee essential services such as telecommunications, basic sanitation, electricity, aviation, pharmaceuticals, transportation, health plans, etc.
At the event, Senator Laércio Oliveira (PP-SE), author of one of the bills guaranteeing administrative and financial autonomy to regulatory bodies, called for the agencies' engagement. And Congressman Júlio Lopes (PP-RJ), president of the parliamentary front, pointed out that, without autonomy, "the regulatory system becomes hostage to the government of the day."
“The agencies today deal with multimillion-dollar cases, but they lack protection, and we need budgetary autonomy,” said Artur Watt Neto, CEO of the National Petroleum Agency (ANP). “We have to strengthen this fight and seek budgetary protection.”
The Director-General of the National Mining Agency (ANM), Mauro Henrique Moreira, warned that agencies continue to face difficulties with budget cuts and that the staff shortage in his agency reaches 70%.
“Every project that is held back represents an investment that is not made in Brazil. And when the government looks at the fiscal issue, it doesn't look at the revenue-raising capacity of the agencies,” Moreira stated.
“We are not defenders of the government. Brazil has enormous potential to attract foreign investment, and I hope that we can work with predictability in this regard,” stated Alessandro Baumgartner, director of the National Land Transport Agency (ANTT).
The Director-General of the National Electric Energy Agency (ANEEL), Sandoval Feitosa, admitted a "weakness in the mobilization" of the agencies recently, which he explained by the chronic shortage of director positions, which remained vacant for months in several agencies. "There was an occasion when, out of the 11 agencies, we only had four directors-general with mandates," he said.
Feitosa emphasized the need for regulatory bodies to demand answers from Congress regarding the financial autonomy of these agencies. The Director-General of ANEEL participated in the drafting of the proposed laws, which are currently being processed in the Legislature. "Today, 60% of the entire formal economy of the country goes through the decision-making process of regulatory agencies in Brazil," he stated.
According to Marcelo Guaranys, former president of the National Civil Aviation Agency (ANAC) between 2011 and 2016 and now a partner at Demarest (law firm), it is necessary to establish a percentage of the revenue collected by the agencies from fines, fees, and charges that would be returned to the agencies themselves. Different percentages should be applied to each regulatory body on a case-by-case basis, in order to convince the government's economic team, which is not usually willing to completely shield these revenues from the agencies.
"It's difficult to imagine the Treasury agreeing to leave 100% [of the revenue] to the agencies. They will certainly block this model of total autonomy. The key is knowing where it's possible to converge to reduce the restrictions that will arise," stated Guaranys, who also served as executive secretary of the Ministry of Finance during Paulo Guedes's administration.
Government vs. TCU
In February of this year, in a plenary decision, the Federal Court of Accounts (TCU) sided with the agencies and prevented the government from freezing the budget of the 11 federal agencies allocated to operating expenses and oversight. It also mandated that the economic team present a plan for the financial autonomy of the agencies and provide justification whenever other budget cuts were made.
The Executive Branch filed an appeal against the Court of Accounts' decision, which has already been denied. In a statement to NeoFeed , the TCU (Federal Court of Accounts) responded that "the process is still underway, with an appeal pending analysis, and no date set for judgment."
The Ministry of Planning stated that it respects the Court's decisions. It further argued that any proposals from regulatory agencies to alter any methodology for allocating their resources should be conducted "within the framework of the regular budgetary process, based on requests from sectoral ministries or administrative bodies and submitted to the evaluation of the Budget Execution Board (JEO)."
"These demands need to be evaluated in light of the current fiscal scenario, which currently imposes budgetary constraints on all federal agencies," the Planning Ministry stated in a note to NeoFeed.
