The LDP and DPJ talk past each other

A six-party conference of government and opposition parties met Friday to negotiate a compromise on the future of the special fund for road construction. Debate will begin in earnest on Wednesday, a week before the governing coalition is expected to use its HR supermajority to reimpose the temporary gasoline tax.

According to Mainichi, at the initial meeting Tanigaki Sadakazu, chairman of the LDP PARC, called for a review of the parties’ positions on a broad spectrum of issues, including the absorption of the road construction fund into the general fund and the temporary tax, subsidies to local governments and the state of local government finances, road construction plans, and the reform of related public corporations. Yamaoka Kenji, the chair of the DPJ’s Diet strategy commitee, objected, arguing that the conference should focus on the matter immediately at hand: the road construction fund and the temporary tax.

This dispute is revealing about the nature of the conference. The purpose of this conference is not to forge a compromise amenable to all parties. The purpose of this conference is to provide the LDP, and to a lesser extent the DPJ, political cover. The LDP needs to appear conciliatory before the HR votes again first on the temporary tax at the end of April and the road construction bill two weeks later, so as to undermine the inevitable argument that it is acting heavy-handed in overruling the HC. So why not call a compromise conference that has a broad remit, a remit so broad and a timeline so brief as to ensure that no agreement will be forthcoming? I find it hard to believe, as the LDP leadership argues, that it is the DPJ alone that is playing politics with important national issues.

For its part, the DPJ isn’t interested in compromise at the moment. Why should it be? It has painted the Fukuda government into a corner by opposing the temporary tax, forcing the government to take the potentially unpopular step of reimposing the tax. It has used road construction plans as a wedge issue, forcing the LDP’s reformists to fight with the zoku giin over the future of road construction, with Mr. Fukuda caught in the crossfire. Accordingly, the DPJ is divided less over whether to compromise than over the party’s response to the increasingly inevitable HR re-vote on the tax and road construction bills. That decision may now rest solely in Mr. Ozawa’s hands as the DPJ’s HC caucus has announced that it will respect party policy.

Going into the conference, it is the LDP that has yet to figure out what it stands for in this debate. The official stance, of course, is Mr. Fukuda’s plan to move road construction funds into the general fund from FY2009 while renewing the temporary gasoline tax and possibly re-envisioning the tax as a “green tax.” But as Sankei points out, there is considerable (and open) discontent with Mr. Fukuda’s approach on all sides of the LDP. Some fear the electoral consequences of restoring the temporary tax. The zoku giin oppose a compromise, and hope that the HR will re-pass the same road construction bill in May that it passed in March, instead of considering a new compromise bill. The reformists want a compromise bill and are supposedly ready to vote against the prevailing bill. And the party’s cautious elders — perhaps we should call them the 慎重派 (the shincho-ha, the cautious faction) — are, as always, cautious.

The LDP’s internal discontent shows no signs of abating. Ishihara Nobuteru, a potential reformist contender for the LDP’s leadership in the future, gave a speech in Fukuoka Friday that described Mr. Fukuda’s compromise plan to move road funds to the general from 2009 as “clearly inconsistent.” On the other side of the debate, Mr. Tanigaki argued in Hokkaido that neither bill should be revised: the temporary tax should be reimposed and gasoline tax revenue should continue to go to road construction, otherwise the finances of local governments will suffer and public works projects will not be completed. (Mr. Tanigaki’s hardline position is interesting considering that he is involved in the compromise conference discussed above.)

It remains unclear whether internal discontent will manifest itself when the HR votes on the temporary tax and the road construction bills. It is entirely possible that the LDP will be torn asunder by rebellion in the coming weeks.

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