Takaichi Loses in a Battle over Budget Bill

Political confrontation between Prime Minister Sanae Takaichi and the opposition parties over FY2026 budget bill in the Upper House resulted in concessive retreat of Takaichi. Her government announced that it would submit a provisional budget bill to the Diet, being afraid of its failure in passing the FY2026 budget bill within this month. It would be the first setback for Takaichi, who maintains high approval rate, after sweeping victory of her Liberal Democratic Party (LDP) in Lower House election in February 8th. 

Minister of Finance, Satsuki Katayama, announced on March 24th that her ministry would form a provisional budget “preparing for an unpredictable event.” The leaders of LDP in the Upper House visited the Prime Minister’s Official Residence and noticed Chief Cabinet Secretary, Minoru Kihara, that they would be unable to pass the FY2026 budget bill by the end of March.

 

Takaichi has been insisting that the bill should pass the Diet by the end of March, which meant the end of FY2025. Although the opposition parties demanded her to have a provisional budget, because the bill may not pass by the end of March when they closely examine it in the Upper House. Believing that she had power to push the bill, backed by high popularity, Takaichi kept on ignoring that demand.

 

The LDP achieved a supermajority in the Lower House after the victory in February election. It was possible for the party to control procedures of bills in the Lower House. But the LDP extremely cut the time for discussion in the Lower House to send the bill to the Upper House as fast as possible. It stiffened the opposition parties in the Upper House, in which the leading coalition of LDP and Japan Innovation Party does not have a majority.

 

Opposition parties threatened the LDP that they would not pass some bills which had to be enacted within FY2025. Subsidy for tuition of high schools and school lunch is one of those bills. The chair of education committee in the Upper House is occupied by an opposition party. The chairperson can control schedule of discussion for the bill. If the bill would not pass by the end of March, high school tuition and school lunch may not be subsidized.

 

Takaichi realized that she did not have a superpower in the Upper House. She gave up passing FY2026 budget bill by the end of March and decided to make a provisional budget bill for early April. Even though the government will not be shut down, the budget is needed to promote some projects to be implemented in early period of new fiscal year.

 

Given constitutional provision to pass the budget bill after 30 days from passage in the Lower House, FY2026 budget bill will pass the Diet on April 11 at latest. The provisional budget bill will be for between April 1st and 11th. If the LDP was modest enough to refrain from shortening schedule in the Lower House, the opposition parties might be cooperative in the Upper House. Takaichi seemed to be raptured by a historical victory in the Lower House election.

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