Moving toward the goal of compiling the government’s fiscal 2008 budget by the end of December, government agencies and ministries will be busy with their negotiations with the Finance Ministry. But the work to compile the budget will face difficulty because of the opaque political situation.

The biggest factor is the LDP-Komeito ruling coalition’s defeat in the July 29 Upper House election. Since the Democratic Party of Japan is the No. 1 party in the chamber and the opposition force is in a position to control it, the Upper House can vote down bills passed by the Lower House. But as far as the budget is concerned, the Constitution stipulates that the Lower House’s decision takes precedence over whatever the Upper House does.

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