The DPJ is calling this Diet session the Gasoline Diet, an incendiary title if ever there was one, and making the extension of the temporary surcharge on the gasoline taxes the signature issue this time around. If they had known that they would do that, they might have called the one that ended on January 15 the Diesel Fuel Diet then, since 76 days out of the 128-day session were devoted mainly to the bill to extend (and later to resume) JMSDF refueling operations in the “Indian Ocean” in support of counterterrorism activities. But they hadn’t known (as I will show later). In any case, the DPJ’s plans have been the same in both cases: force the LDP-New Kōmeitō coalition to exercise what the DPJ hopes will be a deeply unpopular supermajority override, pass an Upper House censure motion against the Fukuda Cabinet, and use the momentum to force a snap election under favorable conditions. If the LDP caves － according to opinion polls, two-thirds of the public oppose the extension, so it’s not inconceivable － fine; the DPJ has made an impressive show of its might with the backing of the people’s will. That too, augurs well for DPJ prospects of power.
There is another neat parallel between the two issues though.
The policy manifest* with which they went into the July Upper House election includes many useful ideas and could serve as a good starting point in building towards a working national consensus to transform a nation with chronic difficulties. However, as much as the DPJ likes to claim a mandate from that victory, the refueling operations (or for that matter, the War on Terror) do not appear in the list of proposals. It must have been a deliberate omission, since the War in Iraq (DPJ position: get out, now) was explicitly included. The manifest did not mention gasoline taxes either, while devoting an entire item to Making Highways Toll-Free.
The late add-on in both cases is no coincidence. The DPJ positions were taken partly as the result of conviction, but also out of convenience. They are both the brainchild of DPJ leader Ichirō Ozawa, who forced them as party policy in the face of significant internal opposition.
The depths of the potential schisms were revealed most recently on two very recent occasions. On January 24, according to the Yomiuri, “[t]he JMSDF escort ship Murasame set sail to conduct refueling activities in the Indian Ocean under the new counterterrorism act… attending the ceremonies in addition to Chief Cabinet Secretary Machimura and ex-Prime Minister Abe were approximately 20 Diet members from the LDP, New Kōmeitō, and the DPJ. As political events go, though, this was completely overshadowed by an incident the previous day, when three DPJ Diet members, Ōe Yasuhiro, Hideo Watanabe, and Yasuo Yamashita, joined LDP and New Kōmeitō leaders in meeting and greeting approximately 450 prefectural assemblymen, mainly from the LDP, who gathered to kick off their lobbying efforts to maintain the temporary surcharge on the gasoline taxes and keep the money for roads. According to the hardcopy Yomiuri, Mr. Ōe claimed to have 39 signatures from DPJ Diet members, including 25 from the Upper House on a petition opposing the elimination of the surcharge.
All this explains why the DPJ leadership has kept looking over its shoulders for a cue from the public every time the media has asked it how far the DPJ is willing to push the coalition on this issue***.
Where do things go from here? The first determinant of things to come may come as early as next week, if coalition Diet members introduce and pass a 3-month extension in the Lower House, sending it to the Upper House by January 31. This way, the Lower House will be able to use the Lower House supermajority override to enact the full 10-year extension (together with the rest of the special tax measure extensions slated to expire as of March 31) without missing a beat. In this case though, the bridges will have been burnt, and there will be no turning back on the part of the coalition.
But the public does not look favorably on the supermajority override. Moreover, the surcharge itself faces serious public opposition. Thus, the coalition may choose to sit on its hands for the time being in the hopes that a conciliatory approach will help them sway public opinion over the coming weeks. It may help mollify the opposition sufficiently so that some kind of compromise could be worked out with the opposition, or parts thereof. I have no way of knowing what a workable compromise might look like, but a three-year extension － a steep pullback from the ten years in the coalition proposal － while the Diet looks at the entire automotive taxes fits in nicely with the political schedule (at least one Lower House election, and one Upper House election, to seek a public mandate) as well as the DPJ’s still-nebulous plans for fiscal reform.
Foregoing the in-your-face three-month extension runs the very real risk that the DPJ will try to run out the clock. After all, a temporary lapse will cause confusion at the pump, as service stations try to work out what they are going to pass on to the customer and how to go about it. Thus, reinstatement of the deeply unpopular surcharge may be out of the question once it lapses. However, the People’s New Party, with four Upper House votes, appears ready to back the government. More ominously, Mr. Ōe claims to already have 25 Upper House signatories within the DPJ in support of the extension. Since it is impossible for the DPJ leadership to compel any dissenters to give up their Dieｔ seats****, there is a strong likelihood that the coalition can actually pass the relevant tax bill in the Upper House. If it comes to a choice between compromise and the risk of exposing the internal rift, I believe that the DPJ will choose the former. Thus, at this point, I believe that the coalition will forego a three-month extension and a compromise is the most likely outcome. But then, I don’t call the shots, and political strategists here do not read my blog, so your guess is as good as mine.
Now so far, I have written about the issue as if it were the be-all and end-all of the current Diet session. Of course it isn’t. Or shouldn’t be. But in all this, the other, more significant part of the DPJ proposal on gasoline taxes, which is to put the revenue into the general budget (and rename them as a global warming tax), has been all but forgotten. More seriously, the singular focus on the gasoline taxes draws public attention from the other important issues that the DPJ manifest raises.
Another significant foreboding of things to come is the DPJ promise to fully compensate local governments for the roughly trillion (out of the total 2.6 trillion ) yen shortfall in their budgets that the termination of the surcharge will cause in total. If I understand correctly, it promises to do this by relieving local governments of all copayments for public works that are under the direct responsibility of the national government. This is also part of the now-familiar pattern of DPJ behavior under Mr. Ozawa where, in search of political victory, it has made expansive promises that will undermine the wholesale transformation process that it seeks to realize when they take control of the Lower House.
* The DPJ Policy Manifest has 50 policy proposals divided into seven major policy fields. From this, three Promises (on public pensions, child payments, and agricultural subsidies) were chosen to be the headline issues of the Seikatsu-First election campaign.
** Item III-5 in the December 25 DPJ Tax Policy Research Council decision on tax policy for fiscal year 2008 and adopted the following day by the DPJ Shadow Cabinet. It is not clear if the decision received the approval of the full Policy Research Council or the Standing Officers Council. In mid-November, Mr. Ozawa himself had already made a few headlines in the Fuji-Sankei media by advocating the termination of the temporary surcharge. See for instance this Sankei report. However, at the time, he seemed to be leaving room for compromise and specifically mentioned toll-free highways as part of a quid pro quo. This news item did not receive much attention at the time because everyone was focused on the now so-yesterday extension of counter-terrorism bill. In any case, the decision to oppose the extension of the surcharge appears to have substantially postdated the July election.
*** The DPJ behavior with regard to the counterterrorism bill can be explained in a similar way as the result of the lack of a specific mandate and the existence of significant internal dissent.
**** Mr. Kan’s admonished Mr. Ōe for insinuating that he would leave the DPJ if necessary to support the extension and insinuated that he give up his seat, since he was only a proportional seat holder. It appears to be forgotten in the discussion of this issue is that Mr. Ōe has a substantial following in Wakayama Prefecture, where he had a long political career as a second-generation before he ran successfully on the Liberal Party ticket (under Mr. Ozawa, as did Mr. Watanabe) for a proportional seat in the Upper House. In fact, it is reasonable to assume that the personalized votes he received (which enabled him to beat out the DPJ candidates with fewer personalized votes; the sum of party votes and all personalized votes determines the number of seats each party gets, but in the DPJ’s case, it appears to have chosen not to give preference to any of its candidates in the July election so the candidates with the most personalized votes gained all the seats) come exclusively from Wakayama. Thus, Mr. Ōe can claim a mandate of his own and as a practical matter could plausibly take with him a substantial number of electoral votes and a support machine whose loyalties are to him and not to the DPJ itself. That is why I think that Mr. Kan’s veiled demand only appeared to cover his defection from the party. Note that Mr. Watanabe, also a proportional candidate (and with a large home constituency of his own) was not similarly threatened. It goes without saying that Mr. Yamashita, with his prefectural district seat, was not either. All this suggests that unless the DPJ leadership can plausibly threaten dissenters for their next elections, voting in favor of the extension will not affect their status as Upper House members in any significant way.