Ruling coalition rams through record ¥14 trillion extra budget

by Masami Ito and Alex Martin

A record ¥14 trillion extra budget for fiscal 2009 was enacted by the Diet on Friday as the Liberal Democratic Party-New Komeito ruling bloc used its right to override the opposition again and force the legislation through.

The opposition-controlled Upper House had rejected the extra budget earlier Friday, but Article 60 of the Constitution gives the Lower House the power to override the upper chamber to pass budgets, treaties and appointments of prime ministers.

Although it is rare to enact a supplementary budget at the beginning of a fiscal year, Prime Minister Taro Aso made reviving the economy one of his key goals for the session, which will adjourn for the summer next week.

The budgets enactment removes a major hurdle for Aso, but the ruling camp still needs to pass a host of other bills, again related to the budget, that are still being deliberated in the Lower House.

The tax reform bill that passed the Lower House along with the extra budget is still awaiting deliberation in the Upper House. The Diet is set to close on Wednesday, but LDP Secretary General Hiroyuki Hosoda told reporters that the ruling bloc is discussing the possibility of extending the session to secure enough time to pass the remaining bills.

Media reports said the session could be extended for more than 60 days, which would mean pushing back the general election to August at the earliest.

“We would like to seek (the understanding) of the opposition parties to make sure that all of the bills pass,” Hosoda said. Masao Kobayashi of the Democratic Party of Japan, the largest opposition force, slammed the extra budget, calling it a big waste.

“The extra budget is just an excessive, ad hoc, shotgun budget,” Kobayashi said. “We firmly oppose this budget that shows the true colors of the Aso Cabinet, which is only interested in raising its immediate support rate instead of the future of the people’s lives.”

The ¥14 trillion budget includes ¥1.2 trillion for employment support, about ¥3 trillion for financial measures and ¥2 trillion for health and child-rearing aid.

But a large portion of the massive outlay is funded by issuing ¥10 trillion worth of new state bonds, which will bring total bond issuance in fiscal 2009 to a record of ¥44 trillion. Kobayashi pointed out that the nation’s fiscal health is already in a critical state, with more than ¥580 trillion worth of government-issued bonds outstanding.