Brazil's lower chamber handed right-wing President Jair Bolsonaro his first defeat in Congress on Tuesday, the day before his government presents its most important legislative proposal to rein in a gaping budget deficit and spur growth.

The house voted overwhelmingly to suspend an executive order by the Bolsonaro government that altered Brazil's freedom of information law to broaden the number of officials allowed to designate data and documents as secret or ultra-secret.

Lawmakers voted 367 to 57 to fast-track a bill overturning the secrecy measure and government whips were unable to muster votes to avoid defeat.

The bill must still be voted on by the Senate, but the reversal showed that Bolsonaro, who took office on Jan. 1, has not yet been able to organise a coalition in Congress to back his legislative agenda.

On Wednesday, Bolsonaro will send to Congress his plan to overhaul Brazil's generous and costly pension system that eats up more than half of federal spending and is the main factor behind an unsustainable budget deficit.

Approval of pension reform is vital for the recovery of investor confidence in Latin America's largest economy.

The defeat on the floor of the house came one day after Bolsonaro fired a senior minister amid a scandal involving campaign financing for some of his party's congressional candidates in the October elections.

The ousted minister, Gustavo Bebianno, was instrumental in getting Bolsonaro elected but had a run-in with one of the president's sons, triggering the weeks-old government's first cabinet crisis.

In a note to clients, analysts at Eurasia Group said the scandal indicated the administration's political team was in disarray, but they still expected the pension reform to get passed, albeit in a less ambitious version.

Brazil's lower chamber handed right-wing President Jair Bolsonaro his first defeat in Congress on Tuesday, the day before his government presents its most important legislative proposal to rein in a gaping budget deficit and spur growth.

Brazil's lower chamber handed right-wing President Jair Bolsonaro his first defeat in Congress on Tuesday, the day before his government presents its most important legislative proposal to rein in a gaping budget deficit and spur growth. The house voted overwhelmingly to suspend an executive order by the Bolsonaro government that altered Brazil's freedom of information law to broaden the number of officials allowed to designate data and documents as secret or ultra-secret. Lawmakers voted 367 to 57 to fast-track a bill overturning the secrecy measure and government whips were unable to muster votes to avoid defeat. The bill must still be voted on by the Senate, but the reversal showed that Bolsonaro, who took office on Jan. 1, has not yet been able to organise a coalition in Congress to back his legislative agenda. On Wednesday, Bolsonaro will send to Congress his plan to overhaul Brazil's generous and costly pension system that eats up more than half of federal spending and is the main factor behind an unsustainable budget deficit. Approval of pension reform is vital for the recovery of investor confidence in Latin America's largest economy. The defeat on the floor of the house came one day after Bolsonaro fired a senior minister amid a scandal involving campaign financing for some of his party's congressional candidates in the October elections. The ousted minister, Gustavo Bebianno, was instrumental in getting Bolsonaro elected but had a run-in with one of the president's sons, triggering the weeks-old government's first cabinet crisis. In a note to clients, analysts at Eurasia Group said the scandal indicated the administration's political team was in disarray, but they still expected the pension reform to get passed, albeit in a less ambitious version.

Brazil's Bolsonaro suffers first defeat in Congress

Brazilian President Jair Bolsonaro, one of his politician sons and his ultraconservative party were embroiled in a crisis Sunday over a campaign finance scandal threatening the leader's anti-corruption image.

The 63-year-old far-right president, who is just six weeks into his mandate, spoke with top officials in his government Friday and Saturday to try to draw a line under the affair, after key allies turned on him.

Brazilian media, citing anonymous government sources, said the outcome could be the forced exit on Monday of one of his ministers, Gustavo Bebianno, a former chief of his Social Liberal Party who is reportedly suspected of misusing campaign funds in last year's election.

The furore could divert the president's attention as he tries to focus on other priorities, including a bill to reform Brazil's unsustainable pension system, and stepping up pressure on Venezuela as part of a US-led effort to topple President Nicolas Maduro.

Bebianno had tried to downplay the campaign finance allegations. He claimed he had spoken several times with Bolsonaro while the president spent the first half of this month in hospital following stomach surgery.

But one of Bolsonaro's sons, Carlos, denied on Twitter that any discussions took place and accused Bebianno of "lying."

That triggered a storm dividing Bolsonaro's allies.

Rodrigo Maia, the speaker in the lower chamber of Congress and a key figure to help push legislation in the looming pension reform bid, accused the president of using Carlos Bolsonaro -- a state legislator with no official federal government position -- to "ask a minister to resign" rather than finding a solution himself.

"If there's a problem, he (Bolsonaro) must find a solution, he cannot ... get his family to intervene as that creates insecurity," Maia told the Globo News channel.

Damaging scandal

Bebianno met with Bolsonaro on Friday to try to save his job. He later told a Globo News reporter, "I don't know" whether he would remain in his post.

The minister, who is in charge of helping to run the president's office, reportedly told a confidant he regretted helping get Bolsonaro elected.

"I never imagined he would be such a weak president," the G1 news website quoted him saying.

The scandal has thrown light on a suspected campaign financing tactic by some parties in Brazil to divert allocated funds for fake candidates who garner few votes.

Bolsonaro's tourism minister, Marcelo Alvaro Antonio, who belongs to the PSL, also is suspected of resorting to that tactic, though he denies it.

The allegations and the storm threw up by them, are damaging to Bolsonaro, who comfortably won elections last October in large part by vowing to stamp out corruption.

That reputation has been further sullied by suspicions of illegal financial transactions surrounding another of Bolsonaro's sons, Flavio, who is a senator.

A third politician son, Eduardo, a federal lawmaker, has embraced a nationalist politics platform created by Steve Bannon, US President Donald Trump's former strategist.

Brazilian President Jair Bolsonaro, one of his politician sons and his ultraconservative party were embroiled in a crisis Sunday over a campaign finance scandal threatening the leader's anti-corruption image.

Brazilian President Jair Bolsonaro, one of his politician sons and his ultraconservative party were embroiled in a crisis Sunday over a campaign finance scandal threatening the leader's anti-corruption image. The 63-year-old far-right president, who is just six weeks into his mandate, spoke with top officials in his government Friday and Saturday to try to draw a line under the affair, after key allies turned on him. Brazilian media, citing anonymous government sources, said the outcome could be the forced exit on Monday of one of his ministers, Gustavo Bebianno, a former chief of his Social Liberal Party who is reportedly suspected of misusing campaign funds in last year's election. The furore could divert the president's attention as he tries to focus on other priorities, including a bill to reform Brazil's unsustainable pension system, and stepping up pressure on Venezuela as part of a US-led effort to topple President Nicolas Maduro. Bebianno had tried to downplay the campaign finance allegations. He claimed he had spoken several times with Bolsonaro while the president spent the first half of this month in hospital following stomach surgery. But one of Bolsonaro's sons, Carlos, denied on Twitter that any discussions took place and accused Bebianno of "lying." That triggered a storm dividing Bolsonaro's allies. Rodrigo Maia, the speaker in the lower chamber of Congress and a key figure to help push legislation in the looming pension reform bid, accused the president of using Carlos Bolsonaro -- a state legislator with no official federal government position -- to "ask a minister to resign" rather than finding a solution himself. "If there's a problem, he (Bolsonaro) must find a solution, he cannot ... get his family to intervene as that creates insecurity," Maia told the Globo News channel. Damaging scandal Bebianno met with Bolsonaro on Friday to try to save his job. He later told a Globo News reporter, "I don't know" whether he would remain in his post. The minister, who is in charge of helping to run the president's office, reportedly told a confidant he regretted helping get Bolsonaro elected. "I never imagined he would be such a weak president," the G1 news website quoted him saying. The scandal has thrown light on a suspected campaign financing tactic by some parties in Brazil to divert allocated funds for fake candidates who garner few votes. Bolsonaro's tourism minister, Marcelo Alvaro Antonio, who belongs to the PSL, also is suspected of resorting to that tactic, though he denies it. The allegations and the storm threw up by them, are damaging to Bolsonaro, who comfortably won elections last October in large part by vowing to stamp out corruption. That reputation has been further sullied by suspicions of illegal financial transactions surrounding another of Bolsonaro's sons, Flavio, who is a senator. A third politician son, Eduardo, a federal lawmaker, has embraced a nationalist politics platform created by Steve Bannon, US President Donald Trump's former strategist.

Brazil president Jair Bolsonaro in grips of party crisis

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Brazil's Bolsonaro suffers first defeat in Congress

Brazil president Jair Bolsonaro in grips of party crisis