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. Last Updated: 07/27/2016

Crisis Plan Passes Test In Brazil

SAO PAULO, Brazil -- Brazil's president scored a crucial victory when Congress approved belt-tightening measures intended to rein in spending and show the world's lenders the country is serious about economic reform.

Congress voted Wednesday to approve two measures: One limits a civil servant's pension, and the other sets the minimum retirement age at 53 for men and 48 for women.

The government agreed to drop a third measure that would have limited special pensions for people working under hazardous conditions or in hardship posts.

Congress voted 343-125 to approve the pension measure, which will set a $1,000 monthly pension ceiling for retirees from the social security system and 346-131 to approve the new minimum retirement age.

The measures are expected to save $2.5 billion.

While the amount is barely enough to make a dent in Brazil's deficit, it would go along way toward proving that Brazil's Congress is serious about cutting the country's ballooning budget deficit of around $65 billion - 7 percent of the country's gross domestic product.

The vote helps the government measure its chances of getting Congress to approve fiscal austerity measures unveiled last week, analysts said.

Last week, the government unveiled taxes and spending cuts in a bid to save nearly $24 billion in 1999. The measures must be approved by Congress. Brazil is hoping to win an IMF rescue package.