(Updates market prices, adds detail)
By Marcela Ayres, Jamie McGeever and Maria Carolina Marcello
BRASILIA, April 23 (Reuters) - Brazilian markets rose on Tuesday after the path was cleared for a congressional committee vote on pension reform, a sign that the government is finally getting political backing for the most important element of its economic reform agenda.
The benchmark Bovespa stock market index chalked up its best day in three weeks, closing 1.4 percent higher at 95,9234.24 points, while the real bounced back from a four-week low of 3.96 per dollar to end the day stronger at 3.9217.
After President Jair Bolsonaro's government made several minor changes to the bill late on Monday, the Constitutional and Legal Affairs Committee (CCJ) finally analyzed the social security reform bill on Tuesday. Local markets closed before the vote on the bill's constitutionality, which is expected to take place later on Tuesday evening.
But investors were cheered by the fact that the vote was scheduled at all - it was postponed last week - and the signal from CCJ committee member Marcelo Freitas that the bill's targeted savings of just over 1 trillion reais ($255 billion) over the next decade had not been diluted.
"This is great news," said Jason Vieira, chief economist at Infinity Asset Management in Sao Paulo, noting that the deal was a sign of easing political tensions.
The government, economists and investors say pension reform is essential to get Brazil's fiscal deficit under control, make it an attractive investment destination and accelerate what has been an anemic recovery from the 2015-16 recession.
Underscoring the importance of social security reform, the Economy Ministry on Tuesday published figures that showed Brazil's public sector structural deficit widened to 0.7 percent of gross domestic product in 2018 from 0.5 percent the year before.
Brazil's spending on social security is among the highest in the world, and a radical overhaul was a key proposal of Bolsonaro's election campaign. But the government has lost momentum on the pension legislation recently, and economic data suggests the economy is flagging, perhaps even shrinking.
"The government needs wins, and better communication skills," said one portfolio manager in Sao Paulo. "There will always be noise, as media and establishment opposition is fierce. But at least the government must stop shooting itself in the foot."
Once passed by the CCJ, the bill still needs to go to a special lower house commission before proceeding to the lower house plenary, where it will need at least 308 votes in two rounds of voting in order to advance to the Senate. ($1 = 3.9217 reais) (Reporting by Marcela Ayres, Maria Carolina Marcello and Jamie McGeever; writing by Jamie McGeever; editing by Matthew Lewis and Lisa Shumaker)