Brazil’s economic team and the leadership of Congress met late Tuesday, 8 July, in an effort to break a standoff over President Luiz Inácio Lula da Silva’s decree raising the IOF financial-transactions tax. Finance Minister Fernando Haddad, Institutional Relations Minister Gleisi Hoffmann and Attorney-General Jorge Messias sat down with Chamber of Deputies President Hugo Motta and Senate President Davi Alcolumbre in Brasília. Participants described the encounter as a reopening of dialogue but acknowledged it ended without an accord. Haddad reiterated that the government will not withdraw the decree, arguing it is both constitutionally valid and needed to generate about R$10-12 billion in revenue this year while safeguarding the executive’s power to adjust tax rules. Motta and Alcolumbre countered that the Legislature sees no political support for higher taxes and urged the administration to consider spending cuts instead. Without a deal, the government warns it may have to freeze a further R$10 billion in expenditures to meet its 2025 fiscal target of a balanced primary result. The impasse now moves to the Supreme Federal Court, where Justice Alexandre de Moraes has suspended both the presidential decree and the congressional vote that annulled it and scheduled a conciliation hearing for 15 July. Officials from both branches said they hope to present common ground before that session, but privately concede that substantial differences over tax policy and institutional prerogatives persist.