With time running short before the July 22 House of Councilors election, the explosive pension data debacle is looking to be the killer issue for Prime Minister Shinzo Abe and his disintegrating Cabinet.

If Abe fails to find and fix the root cause of the system’s structural problems, his Liberal Democratic Party and coalition partner New Komeito are likely to suffer a major setback in the poll, and if so, mounting pressure on Abe to step down, experts said.

The Democratic Party of Japan’s discovery that the Social Insurance Agency failed to keep track of 50 million pension accounts has deepened public concern over the already crumbling pension system. The problem widened this week after health minister Hakuo Yanagisawa announced Wednesday that the ministry has stumbled across an additional 14.3 million accounts on microfilm that were not put into the computers.

“If Abe fails to deal with the problem, the ruling bloc will definitely fall short of a majority in the Upper House,” predicted Kazuhisa Kawakami, a political science professor at Meiji Gakuin University in Tokyo.

To get a simple majority in the 242-seat chamber, the ruling bloc will have to win at least 64 of the 121 seats up for grabs this election. It currently has 58 seats that won’t be contested this time and will thus automatically retain them.

Abe’s public approval ratings meanwhile tumbled to a new low over last weekend. A June 2-3 survey by the Asahi Shimbun on 1,045 people, for instance, found the Cabinet support rate had fallen to 30 percent, or less than a half the 63 percent Abe’s administration had after taking office in September.

Although the coalition still holds a commanding two-thirds of the 480 seats in the all-important Lower House and the political impact of an Upper House election is less significant, analysts are calling the July poll the first national referendum on Abe, who has not been tested in a national election since taking office.

“If the coalition fails to (retain its) majority in the Upper House, Abe should immediately dissolve the Lower House (for a general election and a public mandate),” said Masaru Nishio, a former professor at International Christian University who is a representative of the National Congress for the 21st Century Japan, a group of nonpartisan academics.

The deepening pension scandal has already forced Abe to shift his policy focus for the election.

On Tuesday, the LDP released its election campaign pledges, vowing to get to the bottom of the pension system fiasco and begin a campaign in 2010 to amend the war-renouncing Constitution.

“Initially, the LDP didn’t want pension issues to become the focus of the campaign, but it couldn’t help bringing up the topic because, if it doesn’t, it will convey the image that it is running away from an important issue,” said Jun Iio, a professor of government administration at the National Graduate Institute for Policy Studies.

The crumbling public pension system spells trauma for Abe and his party, which suffered a setback in the 2004 Upper House election in part because of another pension scandal: the discovery that Cabinet ministers, including then Chief Cabinet Secretary Yasuo Fukuda, were not paying their pension premiums.

Coupled with the simmering battle between younger generations reluctant to pay into a troubled pension system that is being drained at an accelerating pace by the nation’s seniors, the premium nonpayments were considered a major election issue at the time. As a result, the main opposition force — the DPJ — swooped in to claim 50 seats, while the LDP took 49 and New Komeito 11.

Who was in charge of the LDP’s election campaign at the time? Then Secretary General Shinzo Abe.

Reflecting the LDP’s desperation, the ruling bloc submitted a hastily drafted bill to the Diet and rammed it through the Lower House last week with unusual speed.

The bill, currently in the Upper House, will abolish the five-year statute of limitations on pension claims so people whose data have been scrambled can still apply for what they are entitled to, assuming the government will eventually be able to determine who they are.

Abe will have little chance of diluting the pension fiasco before the July poll, said Ikuo Kume, a professor of politics and economics at Waseda University.

One tack might be to find a foreign policy achievement. But Abe’s announcement of a new greenhouse gas initiative at the Group of Eight summit in Heiligendamm, Germany, is unlikely to impress the general public, Kume said, adding this leaves one other option: honesty.

“The only step left for Abe is to address the pension scandal squarely,” Kume said.

But that might just lead to bigger problems.

Abe has said the SIA will need a year to cross-check the data from the 50 million cases and that the affected people who can be identified would be notified within six months.

But some agency officials say many of the 50 million cases may never be identified because some of the data were recorded on documents and have already been discarded.

This does not bode well for Abe and the LDP.

“It is hard for Abe to drastically turn around his approval ratings, and I think his party is likely to lose the Upper House election,” Kume said.

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