Brazil's Temer sticks to leaner government plan after outcry

By Lisandra Paraguassu

By Lisandra Paraguassu

BRASILIA (Reuters) - Vice President Michel Temer, expected to take over soon as Brazil's acting president, plans to cut the number of government ministries to 22 from 32, a close advisor said on Tuesday.

Temer appeared to waver in recent days on a vow to eliminate about 10 ministries as he sought to accommodate political allies to widen support for a transitional government, but Senator Romero Jucá said the vice president was sticking with the plan.

Temer is set to replace President Dilma Rousseff if the Senate votes on Wednesday, as expected, to put her on trial for breaking budget laws in an impeachment process that will end 13 years of rule by the leftist Workers Party.

The smaller cabinet promised by Temer is largely a symbolic cost-savings measure meant to show his determination to put Brazil's public accounts in order and plug a gaping fiscal deficit.

"Vice President Michel Temer proposed a new configuration of the Cabinet cutting 10 ministries," Jucá told journalists after a meeting between Temer and Senate President Renan Calheiros.

The Science and Technology portfolio will become part of the Communications Ministry, Jucá said. Ports, Civil Aviation and Transport will become one superministry of Infrastructure, an area seen as crucial to pulling Brazil from its worst recession in decades.

More controversial will be Temer's plan to put Agrarian Reform under the wing of the Social Development Ministry and trim other ministries attending to dedicated constituencies.

Temer plans to subordinate Culture to the Education Ministry and eliminate the Human Rights Ministry, which would become part of a new Justice and Citizenship ministry, three sources familiar with the plan told Reuters.

Temer is also considering removing Social Security from the Labor Ministry and adding it to the Finance Ministry, which will lead efforts to reform the costly pensions system.

Temer could also strip the central bank governor of its ministerial status, two sources told Reuters. The demotion, should it occur, is expected to cause concerns on financial markets about his commitment to independent monetary policy.

Temer has, however, formed a market-friendly cabinet with pro-business figures to restore confidence in Latin America's largest economy, stuck in its second year of recession.

The one near-certain appointment is that of former BankBoston Chairman Henrique Meirelles as finance minister. Meirelles, an inflation hawk who led the central bank between 2003 and 2010, is Temer's top choice to return Brazil to growth.

(Additonal reporting by Alonso Soto and Anthony Boadle; Writing by Anthony Boadle; Editing by Dan Grebler and Andrew Hay)