With the government unable to find further effective ways to cut expenditures, Prime Minister Junichiro Koizumi's goal of reconstructing government finances is facing a crucial test.
Observers say Koizumi might eventually have to increase the consumption tax for the sake of restoring sound public finances.
On Aug. 26, Koizumi reportedly told Finance Minister Sadakazu Tanigaki, "You should take one step forward and bear the brunt of criticism."