TOKYO (MNI) – Prime Minister Naoto Kan and senior officials at the
ruling Democratic Party of Japan have agreed to extend the current
parliamentary session by 70 days, paving the way for passage of crucial
budget bills and Kan’s resignation as early as at the end of August,
Japanese media reported on Wednesday.

DPJ Secretary-General Katsuya Okada will officially present the
plan to other parties today, public broadcaster NHK and newspapers said.

Regardless of whether the opposition parties agree, the DPJ plans
to approve the extension in the lower house in which it holds a
controlling majority, they said.

The 150-day Diet session was originally scheduled to end on
Wednesday but the need to continue funding reconstruction of the
northeastern regions wrecked by the March 31 earthquake disaster has
prompted some lawmakers to call for a long extension by three months or
even through yearend.

With their plan for a 70-day extension, Kan and his party deputies
wish to pass legislation needed to issue deficit-covering bonds for the
fiscal 2011 national budget as well as a second disaster-response
supplementary budget.

Without the bills’ approval by parliament, the government would not
be able to secure about 40% of the revenue planned in the Y92.41
trillion budget for the current fiscal year.

But the main opposition Liberal Democratic Party would not allow
the budget-related bills to be approved in the opposition-controlled
upper house of the Diet if the DPJ stuck to its 2009 parliamentary
election campaign promises, such as the new monthly allowance program
for families with children.

The DPJ may offer a compromise, setting an upper limit on
household income in the program, the reports said.

Even if the opposition-controlled upper house refused to discuss
the budget bills, the government could send them back to the lower house
60 days after it was sent to the upper house and vote on them.

The 70-day extension through Aug. 31 should allow the government to
secure passage of those bills, NHK said.

Kan took office in June last year from his predecessor, Yukio
Hatoyama, who resigned after losing public support over the broken
promise to relocate the controversial U.S. air base from the southern
island of Okinawa.

Earlier this month, Kan survived the worst crisis of his
12-month-old government by promising to quit at an unspecified future
date in an attempt to keep political infighting from breaking up the
ruling party.

On June 2, parliament rejected a no-confidence motion submitted by
opposition parties against the prime minister and his cabinet.

At the time Kan told lawmakers from the ruling party that he will
step down sometime after the rebuilding program for the northeastern
regions hit by the March 11 earthquake disaster is firmly underway and
the crisis at the Fukushima Daiichi nuclear power plant is under
control.

tokyo@marketnews.com
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