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Wednesday, March 3, 2010

DPJ-led bloc's vote passes 2010 budget

Record-setting amount reflects campaign vows

Staff writer

The Democratic Party of Japan-led coalition passed the fiscal 2010 budget in the Lower House on Tuesday evening, having survived relentless grilling from the opposition over a series of political funding scandals.

Although the opposition, led by the Liberal Democratic Party, voted against the plan in the Lower House Budget Committee, it was supported by the DPJ and its two junior partners, the Social Democratic Party and Kokumin Shinto (People's New Party).

The ¥92.3 trillion budget and related bills cleared the plenary session vote with the ruling coalition's comfortable majority.

Lower House passage of the budget will ensure it clears the Diet before the start of the fiscal year in April, since the decision takes effect within 30 days even if the Upper House does not hold a vote.

"Considering the impact it has on the public's lives, I hope (the budget plan) clears the Diet within the fiscal year," Prime Minister Yukio Hatoyama said, adding that deliberations in the Upper House will not be trouble-free.

"The issue of politics and money will obviously be a theme" in the Upper House, Hatoyama said, adding about his own funds scandal: "I will handle it sincerely and continue fulfilling my responsibility to explain."

Passing a budget before a fiscal year starts is crucial for any administration, but the DPJ's dodgy funding has put additional pressure on Hatoyama's inexperienced Cabinet. And this budget is the largest in history.

The LDP-led opposition camp has constantly slammed Hatoyama's mismanagement of donations from his mother, as well as DPJ Secretary General Ichiro Ozawa's shady funds reporting in connection with a land purchase that led to the arrests of his secretaries.

The LDP boycotted some Lower House deliberations last month and repeatedly demanded that Ozawa testify before the Diet over his funds scandal.

Heading into Upper House deliberations, the ruling bloc is also expected to face the criticism over yet another scandal, involving the arrest of members of a teachers union in connection with illegal donations to Lower House member Chiyomi Kobayashi.

Hatoyama's first annual budget includes cash for households, which he hopes will lift the lethargic economy.

The record-high ¥92.3 trillion budget has ballooned as the DPJ tries to live up to campaign pledges, including monthly allowances for children and free high school education.

The budget calls for a nearly 10 percent rise in welfare spending to ¥27.27 trillion, while public works projects have been slashed by more than 18 percent to ¥5.77 trillion, the lowest level in 32 years.

Despite trimming the budget from an earlier proposed ¥95 trillion, falling tax revenues have forced the government to crank out an unprecedented ¥44.3 trillion in new bonds.

This made Hatoyama backpedal on some promises, including cutting a gasoline tax, to try to cap the budget gap.

The government will also tap into reserves and retained earnings in special accounts to pull in an additional ¥10.6 trillion in nontax receipts.

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The Japan Times

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