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ONLINE DOCUMENT: BRAZIL STRUGGLES WITH CIVIL SERVICE, SOCIAL SECURITY REFORMS

Tense and impatient, Luiz Carlos Santos was explaining the peculiarities of governing Brazil, a country with one foot in the next century and one in the last.

Suddenly an aide entered his office in Brasilia, bearing really awful news. The Chamber of Deputies had just dropped a huge roadblock in the path of social security reforms, rejecting the government's bid to establish a minimum age for civil-service pensions."The reform is dead," said Santos, who is minister of congressional relations in President Fernando Henrique Cardoso's cabinet.

It proved to be a premature judgment, for the next day he was back at the task of trying to rally support for the reforms among fickle deputies.

But the vote, one of three that the government lost that day last week, was a serious blow, and many Brazilians believe Cardoso's bid to overhaul outmoded state structures in Latin America's largest country is in serious jeopardy.

"The government is rapidly losing its opportunity," said Candido Grzybowski, executive director of the Brazilian Institute for Social and Economic Analysis. "If it doesn't get the reforms done this year, it will be difficult to do them at all."

Cardoso had sought to set a minimum age for civil-service retirement benefits of 55 for men and 50 for women. He also wanted to abolish rules that automatically extend wage increases won by active civil servants to those who are retired, as well as special retirement rules for university professors.

None of the measures gained the required three-fifths of deputies' support.

The government's reform program also includes measures that would make it easier to fire civil servants for incompetence and deny job security to those with less than five years' service. A third set of measures would overhaul the tax system.

Because they are aimed at making the state more efficient, the changes are broadly supported by Brazilian business people and foreign investors.

Their fate also could be an indicator of Cardoso's future success in economic matters. The same Congress that turned down the pension reforms last week recently approved new rules for telecommunications investment.

The president's difficulties are rooted in a weak party system that has more to do with personalities and regional interests than political ideas.

Cardoso, a Social Democrat who was elected in 1994, formed a governing alliance with several political factions, including powerful conservative chieftains based in the impoverished northeast. But deputies who pledged to support him have not always done so, following a long-standing tradition of making last-minute patronage demands in return for their votes.

The problem became so acute that Santos, formerly government leader in the chamber, was brought into the cabinet to give him more clout in persuading deputies to stay onside.

Some congressmen are reflecting the fears of pensioners and civil servants who stand to lose significant benefits if the reforms are passed.

The government says the reforms will produce a more professional and better respected civil service. But Grzybowski said they could further impoverish remote areas where the principal source of income is pension checks.

Other congressmen are simply bargaining. According to press reports, deputies from the far western state of Acre are trying to influence the selection of a new superintendent of agrarian reform. Still others are afraid their own political interests will be hurt.

Santos said the government has no choice but to pursue its strategy because Brazil needs foreign investment for continued growth. "Investment will only arrive insofar as the country has credibility," he said, adding that the chief opposition is coming from those who stand to lose privileges.

Cardoso is giving no signs of abandoning his strategy of deal-making with centrists and conservatives.

"He bears the responsibility for the situation he's in now, because it's a result of the alliances he's made," Grzybowski said. An alternative course, he said, would be a campaign to rally public opinion in favor of the changes.

But Cardoso is a negotiator by nature with little taste for populism, and Grzybowski said he was unlikely to change his strategy.

(Distributed by Scripps Howard News Service.)