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Friday, Jan. 16, 2009

Aso's days said numbered

Deadlock forecast for ruling bloc by spring after '09 budget passed


Staff writer

Now that Prime Minister Taro Aso managed Tuesday to force the second extra budget for fiscal 2008 through the Lower House, his next hurdle is the fiscal 2009 budget and related bills.

He is not going to find easy sailing, because the ruling Liberal Democratic Party is sharply divided on whether to raise the 5 percent consumption tax in three years and its solidarity is now very shaky.

On Christmas Eve, the government and LDP-New Komeito ruling coalition officially authorized a midterm tax reform program to increase the consumption tax in fiscal 2011, providing the economy improves. The government plans to include the program as an additional clause in the tax reform bill for fiscal 2009.

Aso announced his intention to submit the budget for fiscal 2009 to the Diet on Monday.

However, New Komeito has been reluctant to mention the tax increase before the Lower House general election, which must be held this year as the term of the house members expires in September. And some LDP lawmakers, including former Secretary General Hidenao Nakagawa and former Chief Cabinet Secretary Yasuhisa Shiozaki, have voiced their opposition to the tax hike as well.

But Chief Cabinet Secretary Takeo Kawamura stressed Thursday that the government has no intention of changing its course and that lawmakers should take a long-term view, as the issue is crucial for Japan's future.

"Surely, I don't believe lawmakers would discuss the tax hike from the viewpoint that it (could impact) the election," Kawamura said. Whether to raise the consumption tax "is an important issue on which we must decide the policy — and discussions should be made from that standpoint."

The coming months for the Aso administration and the LDP look bleak, critics said, noting a lack of unity in the party that has prompted two members to rebel against their leader's key goals.

Most prominently, ex-administrative reform minister Yoshimi Watanabe left the LDP, while Kenta Matsunami, a parliamentary secretary for the Cabinet Office, walked out of the plenary session before Tuesday's vote on the extra budget to express his opposition to the cash handout program. He was promptly sacked.

"I think the ruling and opposition parties need to discuss how the ¥2 trillion should be used to turn it into something that will truly make the public happy," Matsunami told reporters Tuesday, after walking out on the vote. "I don't think it is a plus factor for the LDP-New Komeito coalition to implement the cash handout program against the will of the public."

The opposition parties were swift to react to the rift in the LDP ranks.

"The parliamentary secretary is a member of the government and one of the people who submitted the budget," said Kenji Yamaoka, Diet affairs chief of the Democratic Party of Japan. "It is illogical — this means the government itself denied its own budget."

The ¥2 trillion cash handout program is included in the second extra budget, but a recent Kyodo News survey showed more than 70 percent of the people do not support it. The opposition parties, led by the DPJ, are strongly against the program, saying the ¥2 trillion would be better used on social security, medical services and employment.

Because the Lower House is given priority on budgets, the extra budget for fiscal 2008 and the fiscal 2009 budget will automatically be enacted 30 days after being handed over to the Upper House for deliberation. But the ruling bloc must hold a second vote in the House of Representatives after 60 days with a two-thirds majority vote to pass the related bills.

With Watanabe having departed the LDP, the ruling bloc will lose its two-thirds majority if 16 more lawmakers rebel against Aso.

Tomoaki Iwai, a professor of political science at Nihon University, said the number of rebels could increase, especially if Aso's popularity continues to sink. The most recent Kyodo News survey showed the support rate for the Aso Cabinet had fallen to 19.2 percent — far below the critical level of 30 percent.

"Because the cash handout program is so unpopular, the rebels could turn out to be heroes by rejecting it and actually be in a favorable position," Iwai explained. "The lawmakers are going to be watching whether it was an advantage or disadvantage for Watanabe and Matsunami, watching the reaction in their electoral districts."

Although it depends on the progress of the deliberations in the Upper House, the ruling bloc is aiming to get the second extra budget and related bills passed by the Diet by mid-March and the fiscal 2009 budget and related bills by mid-April. And with the way things are going, critics say Aso may not last much beyond that.

"I think that by spring, the Aso administration is going to reach a deadlock," Iwai said. "And when that happens, Aso will be driven into a corner and forced into dissolving the Lower House and calling an election."



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