Prime Minister Naoto Kan held a one-on-one Diet debate with opposition party leaders last week — the first such debate since he came to power in June 2010. It showed that both the Democratic Party of Japan and the Liberal Democratic Party share a view that a consumption tax raise is necessary. But both LDP leader Sadakazu Tanigaki and Komeito leader Natsuo Yamaguchi made it clear that their parties will not easily sit at the table with the DPJ to jointly discuss reform of the social welfare system and of the tax system as called for by Mr. Kan.

Because the DPJ controls the Lower House, it will be able to enact the 2011 budget. A Lower House vote on a national budget takes precedence over an Upper House vote. But the debate showed that it will be extremely difficult for the DPJ to enact budget implementation bills, as different from the budget itself, since the opposition controls the Upper House and cooperation from the LDP and Komeito are unlikely to come.

Mr. Tanigaki said that since the DPJ’s 2009 Lower House election manifesto is based on an assumption that the DPJ will not raise the consumption tax, the DPJ must change the manifesto and Mr. Kan should dissolve the Lower House for an election to hear voters’ opinion. The LDP leader refused to join consultations with the DPJ on the social welfare and tax reform by saying that the LDP joining the consultations is like the LDP helping the DPJ break its promise with people. Mr. Yamaguchi said that Mr. Kan should take responsibility because there is no prospect that the DPJ can fulfill the promises contained in its manifesto.

Mr. Kan reiterated without going into substance that the government will present a proposal for social welfare reform in April and a proposal for tax reform in June. As to the DPJ’s manifesto, he said that the DPJ will present a review of it around September. If he revises the manifesto, he will face resistance from within the DPJ and opposition from votes. If he does not revise it, the LDP and Komeito will not cooperate with him. Overcoming this dilemma will be a hard task for Mr. Kan.

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