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Friday, Oct. 17, 2008

DPJ opts to cooperate; extra budget clears Diet

Staff writer

The ¥1.8 trillion fiscal 2008 extra budget aimed at easing the impact of rising oil prices cleared the Diet on Thursday with backing by the opposition-dominated Upper House.

However, the supplementary budget is not designed to deal with the global financial turmoil that boiled over in the United States, and thus the government is expected to take further economic measures in the coming months.

Later the same day, Prime Minister Taro Aso ordered the Cabinet Thursday to come up with an additional economic stimulus package to steer the economy away from the global financial crisis.

The Diet has moved quickly to take care of the bill for the supplementary budget since deliberations started last week — mainly because the Democratic Party of Japan, the largest opposition party and the one with the most seats in the Upper House, reluctantly agreed to cooperate.

Many DPJ lawmakers have raised doubts as to whether the budget will really prove effective.

"There are strong voices from rural areas to do something (about the economic situation). Although we don't think it's a fundamental economic measure, it's better than nothing, so we decided to agree," a DPJ executive said.

The Liberal Democratic Party-New Komeito ruling bloc was initially unsure that the DPJ would cooperate. But the DPJ apparently did not want to be seen as obstructive, given the economic crisis.

The ¥1.8 trillion extra budget includes about ¥440 billion to support small and midsize businesses, and about ¥188 billion to create a low-carbon society and help agriculture, forestry and fisheries, according to the Finance Ministry.

Initially, it was thought that Prime Minister Taro Aso, who repeatedly stressed the importance of the extra budget for the economy, would dissolve the Lower House and call a general election after the budget bill was passed.

But the current Diet session is now likely to continue, with deliberations on the antiterrorism bill starting Friday. In addition, Aso has mentioned the possible need for further economic measures.

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The Japan Times

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