The Lower House on Tuesday approved the government’s 85 trillion yen fiscal 2000 budget, which the ruling bloc calls “a final push” to put the economy back on a recovery track.
Now that the budget has cleared the Lower House, it is certain that it will clear the Diet before the new fiscal year starts on April 1. Decisions of the Lower House on budgetary matters take precedence over that of the Upper House, and the budget will automatically be enacted even if the Upper House rejects it or fails to vote on it within 30 days.
With the major hurdle in the current 150-day regular Diet session now cleared, political attention will shift to when Prime Minister Keizo Obuchi will dissolve the Lower House and call a general election.
Makoto Koga, Diet affair chief of the ruling Liberal Democratic Party, touted the early passage of the budget.
“I think it is an achievement accomplished by the LDP-Liberal Party-New Komeito coalition,” Koga told reporters.
The general-account budget for the year starting April 1, which was presented to the Diet on Jan. 28, was passed by 346 to 133 vote.
The budget is 3.8 percent higher than the previous initial budget record set at 81.86 trillion yen in fiscal 1999.
It features a 2.6 percent expansion in general expenditures to a record 48.09 trillion yen for funding public works and other policy-oriented projects, marking the second straight year of growth in the category.
During Tuesday’s concluding session of the Lower House Budget Committee, the opposition camp criticized Obuchi for lacking the vision to save the state coffers from rapidly growing debts.
Some 38.4 percent of the pump-priming budget is financed by government bonds, which would total 32.6 trillion yen for the fiscal year.
The new government bond issues will push the amount of long-term debts of the central and local governments up to as high as 645 trillion yen, equivalent to 129.3 percent of Japan’s gross domestic product.
Nobutaka Machimura of the ruling LDP said it is now a consensus in both the ruling and opposition camps that rehabilitation of the nation’s fiscal health is essential.
Obuchi argued that fiscal reforms should come only after a recovery is ensured, saying economic growth will boost tax revenues and enable the government to reduce its mounting debts.
But Takahiro Yokomichi, vice president of the Democratic Party of Japan, pointed out that even if the economy grows 3 percent annually, that would increase tax revenues by only 1.4 trillion yen to 1.5 trillion yen.
“State finances will only deteriorate, despite economic growth” if the government keeps spending without fiscal reforms, Yokomichi claimed during Tuesday’s session.
On the timing of the Lower House dissolution, Obuchi said Feb. 20 in Maebashi, Gunma Prefecture, that he will decide on the matter after the budget clears the Diet.
The remark has triggered speculation that he may opt to dissolve the chamber at an early date instead of after the Group of Eight summit in Okinawa in July. The current four-year term of members in the chamber expires in October.
Now the ruling bloc — the LDP, Liberal Party and New Komeito — occupies about 70 percent of the 500-seat Lower House, far outnumbering the opposition camp — the DPJ, Japanese Communist Party and Social Democratic Party.

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