The Lower House was set to enact the fiscal 2011 budget early Tuesday morning, but the fate of related bills critical to financing the government’s massive debt remained up in the air with the divided Diet.

The ¥92.4 trillion budget was set to clear the Lower House budget committee late Monday night and expected to be enacted in a plenary session of the Diet on Tuesday. Although the opposition-controlled Upper House can reject the budget, the more powerful Lower House has the power to override it.

The related bills, however, are a different story. The Upper House is expected to scrap them — including one needed to authorize the issuance of special deficit-covering bonds. The bonds are designed to cover implementation of about 40 percent of the fiscal 2011 budget starting in April, and the ruling coalition lacks the two-thirds majority needed in the Lower House to force them through.

Compounding the problem is the growing rift in the ruling Democratic Party of Japan, which recently saw 16 of its members attempt to break off and form a separate parliamentary group in the Diet. The DPJ is concerned this group of 16 loyal to party heavyweight Ichiro Ozawa will abstain from budget vote Tuesday morning.

Ozawa’s DPJ membership was suspended last month.

Even if all 16 abstain, the ruling coalition has enough votes in the chamber to get the budget through. But the show of disunity would embarrass Prime Minister Naoto Kan, who is desperately trying to garner the critical two-thirds majority. Losing the 16 members’ support would make that much harder for his DPJ-Kokuminshinto alliance.

Abstainers may face punishment, DPJ Secretary General Katsuya Okada warned at a news conference Monday.

“The party needs to deal with it in a strict manner” he said.

In a possible sign of rebellion, Tomohiko Mizuno, one of the 16 Ozawa followers, was removed from the Lower House budget committee after saying he was “unable to attend the session.”

The opposition meanwhile engaged the DPJ in a delaying tactic by submitting a resolution demanding that Budget Committee Chairman Hiroshi Nakai be dismissed. The motion was later shot down by the ruling bloc.

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