Kan short on budget, leadership options

by Natsuko Fukue

Prime Minister Naoto Kan is expected to face mounting calls to resign or call a snap election in order to get the fiscal 2011 budget bills passed on time, experts say.

To enact the budget on April 1, the beginning of fiscal 2011, Kan’s Cabinet must ensure the budget and related bills clear the Lower House at least by the beginning of March, which will give it time to make revisions.

The ruling Democratic Party of Japan is desperately trying to solicit cooperation from the opposition camp to pass the bills and has offered to revise segments of the budget to accommodate other opinions.

While a delay in passing the budget itself would not be particularly unusual, the related bills pose problems because they impact the public as well as the party.

One of the bills at stake, for example, allows the provision of child allowances. The DPJ pledged to provide families ¥13,000 a month for each child under 15. Failing to pass it will break the party’s promise.

Another is a special bill for issuing government bonds to keep the government’s finances afloat. Any delay in enforcing it would threaten to disrupt the government because it covers 44 percent of annual revenue, or about ¥40.7 trillion.

Kan recently issued an appeal in the Lower House Budget Committee for more bipartisan cooperation.

“Both the ruling and opposition camps must share responsibility,” he said, adding that the ruling party needs to discuss the lengths it will to go to in getting the bills passed.

Although Kan appeared to get a lift last week from former ruling coalition partner the Social Democratic Party, which wants to discuss revising the DPJ-written budget, experts still expect Kan to have a rough time.

This is because its former ally wants outlays related to U.S. Marine Corps Air Station Futenma in Okinawa to be frozen in return for its support.

Political analysts say this means the Cabinet will have to solicit support from New Komeito, the second-largest opposition party, instead.

Kan’s flip-flops have not endeared him to the opposition camp, political commentator Hirotada Asakawa noted. He said Kan’s “slow handling” of the affair involving indicted DPJ heavyweight Ichiro Ozawa also indicates weakness.

Kan has been trying to pressure Ozawa to leave the party over his pending trial for alleged political funds misreporting, but the party don again last Thursday refused to budge when the pair met.

Opposition support is crucial in the divided Diet, where the DPJ has a majority in the Lower House and the opposition controls the Upper House. Although the Lower House holds sway over the budget, Kan’s DPJ lacks the constitutional two-thirds majority in the chamber to override Upper House opposition to the budget-related bills.

The SDP’s six members in the Lower House would give the DPJ all but one of the 318 votes it needs to get the budget bills passed. Before approaching the SDP, the DPJ had been seeking support from New Komeito, but the party’s executives recently told reporters they would not cooperate.

At last year’s extraordinary Diet session, New Komeito supported the budget-related bills. This time, it says it is taking a hard line because it distrusts Kan’s leadership ability, a Komeito executive said.

“(The DPJ) messed up with diplomacy,” he said, adding that the ruling party is also stalling over the Ozawa scandal and has even gone as far as appointing former Liberal Democratic Party heavyweight Kaoru Yosano to the Cabinet. “People say we’re like Buddha, but they’ve gone too far this time,” the executive of the lay Buddhist-backed party said.

The LDP and New Komeito plan to agree on a bill regarding customs in order to avoid price increases on imported foods, including meat.

If the opposition camp opposes a bill on tax revenues allocated to local governments, it may delay first-quarter revenue of about ¥4 trillion and hurt local government finances.

When the LDP was running the government in a coalition with New Komeito, the shoe was on the other foot because the then opposition DPJ had captured an Upper House majority. In March 2008, for example, the DPJ strongly blocked a bill for extending a temporary gasoline tax, forcing prices to drop that April. The levy was later restored after the LDP-led ruling bloc voted on it again in the Lower House, where it held a two-thirds majority.

Analyst Asakawa said Kan could pass the bills on time in exchange for dissolving the Lower House and calling a snap election after the Diet session ends. “Some DPJ members even seem to have lost faith in Kan,” he said. “They look like they’re heading to dissolving the Lower House for a snap election.”

However, Koichi Nakano, a political science professor at Sophia University, argued that if the LDP returns as a ruling party, this won’t restore voter trust.

“After all, they voted for the DPJ, wanting a change (from LDP rule),” said Nakano. Even if Kan steps down or the LDP takes power, the Diet will still be divided because they have even fewer seats compared with the DPJ, he said.

“The opposition camp also should not just refuse to talk (with the DPJ). It needs to think about how to constructively resolve the situation.”