Anticipated reactions

The ministry of finance, its ears filled with the ringing of revolution (or at least administrative reform), appears to be engaging in a classic case of anticipated reaction to the prospect of a DPJ government or an LDP government that could take its promise of “cutting waste” seriously. Accordingly, it has instructed requesting ministries to identify wasteful funding in their budget requests due at month’s end. The finance ministry is particularly focused on inefficient public works projects.

The finance ministry is clearly trying to concede some ground to a possible DPJ government in the hopes that doing so will forestall a more forceful attempt by the DPJ to seize budgetary authority, at least in the short term. The anticipated reaction may well fail. On NHK Sunday Naoshima Masayuki, the DPJ’s policy chief, said that if the DPJ takes power it will completely review the budget requests for fiscal year 2010, although he also said that the party wants to complete the budget within the calendar year, which might be difficult given that the party does not know whether it would have its preferred organization for drafting the budget — the national strategy office attached to the prime minister’s office — ready in time to oversee a review of budgetary requests. But the DPJ has made no secret of its desire to restore the cabinet’s constitutionally granted power to draft the budget to the elected representatives serving in the cabinet. Hatoyama Yukio made the DPJ’s intentions clear to Tango Yasutake, the newly appointed administrative vice minister of finance, in a discussion in July. Tango had some praise for the party’s plan for a national strategy office, but overall his reaction was perhaps a bit muted. Tango may well prove amenable to the party’s plans: his service as a secretary to former Prime Minister Koizumi Junichiro may make him more amenable to the idea of “political control.”

But this is just the first phase in what could ultimately be the defining battle of a DPJ government should the party win this month. The DPJ will presumably not be satisfied with waste cut voluntarily by the ministries, but the finance ministry loses little by trying to anticipate the DPJ’s goals now, and by doing may ensure that this year’s budget process goes smoothly despite a possible change of government. But if the DPJ is serious about overhauling the budget-making process so that politicians are responsible not just for determining the overall shape of the budget, but in micro-budgeting, determining which programs belong in the budget and how much public money they deserve, there will be a major struggle between the DPJ and the finance ministry, provided a potential DPJ government survives more than one budget cycle.

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