Brazil’s Congress voted in favor of a Pension Overhaul Bill in a first-round vote.  It can take 45 to 60 days for examination at the Senate to conclude its own second-round vote on the bill.

(The Wall Street Journal) Brazilian lawmakers voted in favor of a bill to overhaul the country’s insolvent pension system, the first and most important hurdle in the bill’s passage through Congress and a major win for the government of President Jair Bolsonaro.

The lower house of Congress voted 379 to 131 to approve the main body of the bill after nine hours of debate Wednesday.

The bill, the centerpiece of Mr. Bolsonaro’s plan to revive Latin America’s biggest economy, alters the constitution and so must still be approved by the lower house in a second vote before it is sent to the Senate. Each vote requires a three-fifths majority for approval.

Lawmakers have estimated the overhaul could save Brazil’s pension system as much as $265 billion over 10 years. That would reduce Brazil’s ballooning budget deficit, avoiding a potentially deep fiscal crisis in the country, but other measures such as tax reform also will be necessary to improve competitiveness and attract investment, economists say.

“This is a vital week for the country,” the head of the lower house of Congress, Rodrigo Maia, wrote Monday on Twitter, where he and other lawmakers have battled to drum up popular support for the bill. “This is an important step to revive growth and create jobs,” he said.

Brazil’s economy is expected to grow less than 1% this year as the country struggles to emerge from its deepest recession on record between 2014 and 2016. The unemployment rate remains above 12%.

Speaking minutes before the final result on Wednesday night, Mr. Maia praised Brazil’s Congress, which has been dogged by a flurry of corruption accusations over recent years and derided by many of Mr. Bolsonaro’s own supporters. “This is where we fix Brazil’s problems,” he said.

Mr. Maia has said he wants to send the bill to the Senate before lawmakers begin a two-week recess on July 18. Political scientists expect the second vote in the lower house to come as soon as this weekend.

Senate President Davi Alcolumbre has said it will take 45 to 60 days for the Senate to conclude its own two-round vote on the bill. That would mean it could be approved around the end of September or beginning of October.

Lawmakers in the lower house and the Senate could still force through exemptions to the proposed bill, which aims to set a minimum retirement age and increase workers’ contributions, among other changes. However, political scientists said Wednesday’s vote represented the first and most critical stage of the bill’s approval.

“This lower house vote is the most important step in the discussion over pension reform because it means that the main points of conflict over the bill have now been resolved—if they hadn’t, we wouldn’t have even got to this point,” said Rafael Cortez, a political scientist at São Paulo-based consulting firm Tendências. The second vote in the lower house is less important as lawmakers are set to make only small changes at that point, and the Senate is also likely to uphold the main points of the bill, Mr. Cortez said.

Brazil’s pension system currently allows some workers to retire in their 40s on almost their full salary and pays generous retirement benefits to tens of thousands of public workers.

Those benefits are enshrined in the country’s 1988 constitution, introduced after the end of the military dictatorship to create a generous safety net for Brazilians. However, the pension system has become the Achilles’ heel of the country’s public finances. Despite Brazil’s relatively young population, pension spending already swallows up 45% of government spending and, without reforms, would continue to spiral as the nation ages.

However, many left-wing parties oppose the reform bill, saying it will only deepen the country’s sharp income divide between the poor and the rich, who largely rely on private-sector pensions and investments to support themselves in their later years.