Japan PM struggles to overcome budget deadlock

By @ibtimes on

Japan's unpopular government was trying on Monday to push through a $1 trillion budget for the year from April but with little chance of getting a divided parliament to pass the bills needed to make it work.

In another blow to beleaguered Prime Minister Naoto Kan, media reported that 16 MPs close to a rival powerbroker in his ruling Democratic Party of Japan (DPJ), were considering boycotting the lower house vote on the 2011/12 budget.

Kan still has enough votes in the lower house to pass the budget but a no-show by the 16 lawmakers would be an embarrassment for the prime minister struggling to enact any policies and facing growing calls, including within the DPJ, to resign.

Related bills to implement the budget require approval of the upper chamber, where the opposition have threatened to use their majority to block legislation.

Failure to pass budget-related bills could cause a shutdown of some parts of the government as early as the summer, similar to what happened in the United States in the 1990s, and increase the chance of a downgrade of Japan's debt rating.

Kan planned to hold off submitting the related bills for a lower house vote on Monday after lawmakers from both camps shouted at each other and pounded tables in debate.

Kan, whose support ratings have sunk to about 20 percent as pressure grows for him to either quit or call a snap election to break the deadlock, which is keeping him from dealing with issues such as huge public debt.

But he told parliament an early election would only lead to uncertainty for the public Kan, in office since last June, is already Japan's fifth premier since 2006.

We are already doing our utmost to pass the budget and budget-related bills and we will work even harder to make sure our efforts lead to results, Chief Cabinet Secretary Yukio Edano told a news conference.

We want to use up our full term to do our best and gain the understanding of the public.

DELAYING TACTICS

Opposition parties were expected to use various delaying tactics, such as motions to censure cabinet ministers, to stall the budget vote in the lower house. It would take effect from the start of the new fiscal year on April 1 as long as it is approved by March 2.

To pass the budget-related bills, however, the DPJ needs to cobble together a simple majority in the upper house or build a two-thirds majority in the lower chamber, which would allow it to override the opposition-controlled upper chamber.

But a former coalition ally has refused to cooperate on budget-enabling bills, including one allowing the issuance of deficit-covering bonds, meaning the DPJ has virtually no chance of securing a two-thirds lower house majority.

The biggest and second-biggest opposition parties, trying to capitalize on Kan's unpopularity ahead of regional elections in April, have ruled out help in the upper house.

A poll by the Nikkei business daily showed support for his government down 9 percentage points at 22 percent, the lowest since he took office last June.

The rate, which has been dragged down by voters' perceptions of diplomatic missteps and lack of leadership, was also in line with the level of support his predecessor had right before quitting after just eight months in power.

The Nikkei poll also showed 37 percent of voters want a snap election, although almost an equal number, 36 percent, said Kan need not call an election or resign. Only 17 percent said he should quit.

Opposition parties have demanded that the DPJ abandon the 2009 campaign manifesto that swept it to power and that Kan call a snap election, although analysts say an election could fail to break the deadlock since no party would be likely to win an outright majority.

While support for the DPJ was down in the Nikkei's latest poll, support for the main opposition Liberal Democratic Party (LDP) was flat, underscoring the view that voters are unhappy with both major parties.

Kan defended the budget bills on Monday, insisting that the spending was needed to keep Japan's moderate, export-driven recovery on track.

It's not that we issued bonds for the manifesto or some other purposes, Kan told parliament.

We're doing this for Japan's economy to recover.

(Additional reporting by Shinichi Saoshiro, Leika Kihara, and Tetsushi Kajimoto, editing by Jonathan Thatcher)

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