Showing posts with label 2008 budget. Show all posts
Showing posts with label 2008 budget. Show all posts

Wednesday, February 27, 2008

The DPJ gets its groove back (for now)

The past six months in Japanese politics have seen some surprising and unexpected events and reversals of momentum — and it looks as if we're in the midst of the latest shift in momentum. The DPJ, after a shaky start to the current Diet session following the government's deft maneuvering on the MSDF refueling mission (and a last-minute ambush by the other opposition parties), now appears to have gotten its act together and is pushing hard on the government on multiple fronts. It's beginning to look a lot like August 2007.

The Atago incident is turning into a major boon for the DPJ. As Jun Okumura notes, intensifying the push for Ishiba Shigeru to resign as defense minister may stymie the government's efforts to pass the budget by Friday, thus ensuring that it will pass even if the HC rejects it: "The less time that there is, the more inclined the LDP will be to make concessions and the less willing the DPJ will be to oblige." Of course, it looked like Mr. Ishiba would be immune to DPJ pressure, thanks to a vote of confidence from the prime minister and his status as probably the one man in the LDP willing (and possibly able) to reform the woefully deficient defense establishment. Even as recently as Tuesday, when Mr. Ishiba faced questioning in the HR Security Committee, he seemed confident dismissing calls for his resignation over this incident. On Wednesday, however, more reports emerged pointing to failures in the gathering and sharing of information between the Defense Ministry and the Coast Guard, implicating Mr. Ishiba's leadership in response to the incident.

Mainichi reports that pressure is now coming from within the LDP, especially LDP leaders in the HC. The prime minister continues to stand by Mr. Ishiba, but it seems that my initial impression was correct: Mr. Ishiba will likely be forced out. Presumably his replacement will be someone less likely to rattle cages and therefore more acceptable to both the LDP and the defense establishment. In short, despite this scandal, it will be business as usual in Ichigaya, once Mr. Ishiba is out of the picture.

Meanwhile the compromise on the leadership succession at the Bank of Japan that everyone — including myself — expected to occur remains elusive. The government decided Tuesday to delay the official presentation of Muto Toshiro, the government's nominee, until next week. With just under three weeks until Mr. Fukui's term expires, there is still time for the LDP and the DPJ to come to an agreement and avoid having a vacancy at the BOJ, but the DPJ is clearly content to make the government wait, to make the point that unlike on other issues, the Fukuda government has no choice but to work with the DPJ. This appears to please Mr. Ozawa to no end. As I suspected, the DPJ may eventually cooperate — but it has no reason to follow the government's desired timetable. Mr. Fukuda, at least according to this Asahi article, sounds a bit exasperated. When asked about Mr. Ozawa's comments on Mr. Muto ("I also know a lot from his time at the Finance Ministry, but whether he is appropriate as BOJ president is a different matter"), Mr. Fukuda said, "He's not really saying anything. We have no choice but to wait."

Finally, on the budget, the DPJ, together with the SDP and the PNP, absented themselves Wednesday from HR Budget and Finance and Monetary subcommittees to protest the government's plan to pass the FY 2008 budget on Friday. Hatoyama Yukio described the government's plan as making "scrap paper" of the LDP-DPJ agreement negotiated by Messrs. Eda and Kono, and warned of consequences in the battle over the BOJ succession. This afternoon the opposition will return to the Budget Committee to debate the special road construction fund. On Wednesday the DPJ announced the basic principles for its own legislation the fund: (1) repealing the temporary gasoline tax; (2) folding the special fund into the general fund; and (3) abolishing the "burden charge" for local communities for state-mandated projects.

Thanks to Mr. Koizumi, the DPJ now has less reason to compromise on this issue than ever. Mainichi reports, "...There is also the hope that the LDP is being rocked internally by the appearance of remarks in favor of the 'general fundization' [of road construction funds] from former Prime Minister Koizumi Junichiro and others. Kan Naoto, DPJ acting president, emphasized at a press conference on the 27th: 'Mr. Koizumi's opinion is close to the DPJ's opinion. If he wants to get us to do reforms that he could not do himself, we welcome that. We also want to urge the LDP's young members who aim for true reform to rise to action."

It looks like the DPJ is finally learning to use "reform" as a wedge issue to get the upper hand in parliamentary battles.

As we have seen, the momentum could easily shift again, but for the moment, the DPJ, which has nothing to lose at this point by taking the mantle of reform from Mr. Koizumi, has painted the government into a corner. On every issue the LDP is playing not to lose.

Sunday, February 17, 2008

Collision ahead

Thanks to Mainichi, we have a calendar of this week's events related to the progress of the budget and budget-related legislation — the latter including the special measures bill on taxation — through the House of Representatives and its committees.

It'll be a busy week.

The budget will be discussed in the Budget Committee all this week. Budget-related legislation will be discussed in the whole House on Tuesday, after which it may or may not go to the Financial and Monetary Affairs Committee. The Budget Committee will debate the subject of road funding on Thursday, with the government's bill directing the balance of gasoline tax revenue to the general fund going before the whole House the same day, after which the bill may or may not go before the Land and Transportation Committee. (In the midst of all this, Kan Naoto — apparently a glutton for punishment — will be debating the temporary gasoline tax at another meeting of the National Governors Association in Tokyo on Tuesday.)

As Mainichi notes, with the DPJ's having shifted its focus from the tax to the special fund for road construction, the battle will be particularly fierce over the government's bill shifting the gasoline tax revenue left after "essential" road construction to the general fund. The DPJ, not surprisingly, considers the government's proposal watered down and ultimately meaningless.

The deal negotiated between Messrs. Kono and Eda is likely doomed, especially once legislation is passed from the HR to the House of Councillors. Koshiish Azuma, head of the DPJ caucus in the HC, promised a decisive battle in the HC over the gasoline tax, which would presumably force the government to extend the temporary tax for two months to give the HR time to pass it again. The government has indicated that it will not relent in the face of HC (and DPJ) intransigence, and will do whatever necessary to prevent the "chaos" that would result from the expiration of the temporary tax.

I hope that the DPJ does not cave on this issue. Even if the government ultimately gets its way on both the temporary tax and the partial redirection of gasoline tax revenue, I hope the DPJ continues to make the point that the LDP would rather fund the construction of "necessary" roads (enriching the companies that build them) than, for example, the failing hospitals that dot the landscape.

Even if the LDP and the Fukuda government win this legislative battle, the DPJ can make it a Pyrrhic victory by using it to illustrate that the LDP, for all the talk of reform, remains a party unable to make the hard decisions required to secure Japan's future.

Monday, February 4, 2008

That rowdy budget committee

The Budget Committee in the House of Councillors is currently debating the 2007 supplementary budget before moving on to the 2008 budget.

The opposition, now in control of the HC, has been giving the prime minister and members of his cabinet a rough time in deliberations, at least according to Yamamoto Ichita, LDP HC member. Writing at his blog, Mr. Yamamoto complained about "excessive vulgar attacks" on the government from the opposition seats. He also complained that the government seats were "too quiet."

According to Mainichi, Murata Renho, DPJ HC member and former TV talent, cited the Social Insurance Agency's manual for dealing with pensioners to question the prime minister. The manual instructs bureaucrats to ask pensioners about "the biggest news story in a particular year" to help jog their memories. Ms. Murata thus asked Mr. Fukuda about the important news from 1976. The prime minister replied, "It does not occur to me quickly," this despite 1976 being the year that his father became prime minister.

The pestering of Prime Minister Fukuda doesn't accomplish much aside from embarrassing him — and showing his age — but these episodes show the lingering weakness of the Diet's committees, even the Budget Committee. Despite opposition control of the HC, does anyone doubt that important deals will be worked out anywhere but in Diet interpellations?