Kan keen to hang on, orders new relief disaster budget
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Posted 6/14/11 , edited 6/14/11

Prime Minister Naoto Kan ordered his administration on Tuesday to craft a small extra budget soon to further assist victims of the March 11 earthquake and tsunami, showing his desire to stay in power for some time, despite mounting pressure for him to step down this month.

Kan is seeking to submit the second extra budget for fiscal 2011 to the Diet ‘‘as soon as possible in July’’ for approval, Chief Cabinet Secretary Yukio Edano said at a news conference.

The budget will likely be no more than 2 trillion yen, ruling party lawmakers said. But Kan did not refer to its possible size during a meeting with Cabinet members in the morning, they said.

Despite Kan’s looming resignation, the government is trying to pass the supplementary budget to secure funds still necessary for the restoration of the disaster-stricken northeastern region.

Kan told a parliamentary session that the extra budget will finance relief programs such as one aimed at reducing the burden of debts on individuals and business owners in the devastated areas.

Finance Minister Yoshihiko Noda said at a news conference the government has no plans to issue deficit-covering or construction bonds to finance the budget, which is widely regarded as a supplement to the first extra budget of 4.02 trillion yen, enacted in May.

In addition to the budget, Kan said during the parliamentary session he will not resign before working out a bill outlining the direction of reconstruction from the natural calamities and a bill to promote the use of renewable energy.

The bill aimed at introducing a system for the purchase of electricity generated by renewable energy, such as solar and wind, at fixed prices by utilities was submitted to the House of Representatives on April 5. But it has yet to be debated by lawmakers in the Diet.

Kan’s Democratic Party of Japan is asking opposition parties to start deliberating the bill together Thursday. But the main opposition Liberal Democratic Party has said it has no plans to cooperate with any government-sponsored bill while Kan is in office.

Kan’s strong will to draw up the supplementary budget and pass the bills was expressed at a time when he is facing intensifying pressure from the LDP and smaller opposition parties, as well as some DPJ lawmakers, to resign by the end of June.

Earlier this month, Kan survived a no-confidence motion in the Diet by promising he would step down after certain progress is made in rebuilding the northeastern region and containing the nuclear accident at the Fukushima Daiichi power plant. But he has left the exact timing of his resignation ambiguous.

LDP Secretary General Nobuteru Ishihara criticized Kan’s latest instruction to create a new budget, saying at a news conference, ‘‘It’s intended to prolong the life of his government’’ and his strategy ‘‘couldn’t be worse.’‘

Although the reconstruction bill is likely to be passed this month with enough support from the opposition bloc, the outlook for approval of the supplementary budget from parliamentarians is uncertain.

The government is seeking to prolong the ongoing ordinary Diet session beyond the scheduled June 22 end to pass the budget and the energy bill. But the main opposition party decided Tuesday not to allow the extension and increase pressure for Kan’s early resignation.

Raising money for the reconstruction work is a big challenge for Japan with public debt already twice the size of its 500 trillion yen economy. The government is exploring the possibility of issuing ‘‘reconstruction bonds’’ for a certain period of time and redeeming them by increasing taxes.

Edano, however, said the government will not choose the option of issuing reconstruction bonds for the next budget.

For the second extra budget, the government appears to be thinking about using reserves in the annual budget for the current fiscal year started in April as well as surplus funds from the previous fiscal year.

In addition, the government is planning to secure more money to speed up the process of clearing rubble and help the people affected by the nuclear accident, triggered by the 9.0 magnitude quake and resulting tsunami, with the forthcoming budget, the lawmakers said.

The DPJ-led government is planning to draft a sizable extra budget by the end of August to finance the country’s largest reconstruction work since the years after World War II, according to the lawmakers.

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