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UNCLAS SECTION 01 OF 11 TOKYO 002075 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 07/30/08 
 
INDEX: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Defense and security affairs: 
4) Meeting with Prime Minister Fukuda, Ambassador Schieffer 
expresses U.S. expectation that Japan will continue Indian Ocean 
refueling services  (Tokyo Shimbun) 
5) It is definite now that new anti-terror law allowing MSDF 
refueling services in Indian Ocean will expire, since New Komeito 
balking at Lower House override  (Sankei) 
6) Opposition group from Okinawa assembly protests at U.S. Embassy 
against "building a new base"  (Akahata) 
7) Defense Ministry plans to provide Zama City subsidy for accepting 
USFJ realignment plan  (Yomiuri) 
8) Self-Defense Forces drill planned for this fall cancelled due to 
soaring fuel prices  (Tokyo Shimbun) 
9) White Paper on Defense, ready in outline, focuses on ministry 
reform  (Tokyo Shimbun) 
 
Diplomacy: 
10) Prime Minister Fukuda will touch down in Beijing for Olympic 
ceremony aboard an SDF plane  (Asahi) 
11) North Korea says its needs more stages before it can fully 
abandon its nuclear program  (Asahi) 
12) ROK premier visiting disputed Takeshima (Dokdo) isles, and ROK 
military stages drill there  (Tokyo Shimbun) 
 
Political agenda: 
13) Heads of ruling parties will meet to coordinate cabinet shuffle 
on Aug. 4  (Sankei) 
14) Foreign Minister Koumura postpones three-nation tour due to 
expected cabinet shuffle  (Mainichi) 
15) Timing of extra Diet session still unsettled, with Fukuda still 
pushing for late August convocation  (Tokyo Shimbun) 
16) New plan to ease the financial situations of the populace but 
little in it reflects a Fukuda policy imprint  (Mainichi) 
 
17) Structural reforms lost in the mist as politicians scramble to 
reverse the course and insert pork barrel into budget, delay plans, 
and strengthen regulations  (Nikkei) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: Mainichi: Yomiuri: Nikkei: Tokyo Shimbun 
WTO negotiations beak down as U.S., China and India remain reluctant 
to make concessions, making long-term stalemate likely 
 
Sankei: 
New Antiterrorism Special Measures Law likely to expire, with New 
Komeito determined not to take part in second vote in Lower House 
 
Akahata: 
Budget request guidelines for fiscal 2009: Social security expenses 
-- constraint on natural increase by 220 billion yen to be 
continued 
 
2) EDITORIALS 
 
TOKYO 00002075  002 OF 011 
 
 
 
Asahi: 
(1) Cabinet shuffle: Policy should come first 
(2) Accidents in rivers: Pitfalls in water parks 
 
Mainichi: 
(1) Social security: Important to translate words into action 
(2) River accident in Kobe: Prepare cities for heavy rain 
 
Yomiuri: 
(1) Fiscal resources needed for social security plan 
(2) Heavy rain leads to accidents in rivers in urban areas 
 
Nikkei: 
(1) Create a powerful budget through bold change in public 
expenditures 
(2) Five proposals in social security plan fall short of ensuring 
peace of mind 
 
Sankei: 
(1) Budget request guidelines for fiscal 2009: Stay on course in 
implementing fiscal reconstruction 
(2) Social security plan: Reform MHLW 
 
Tokyo Shimbun: 
(1) River accidents: Rivers in urban areas can be dangerous 
(2) Budget request guidelines have become hollowed out 
 
Akahata: 
(1) Budget request guidelines: Change the basis of a policy of 
constraining increases in social security expenses 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, July 29 
 
NIKKEI (Page 2) (Full) 
July 30, 2008 
 
08:24 
Met Chief Cabinet Secretary Machimura at the Kantei. 
 
09:21 
Handed recommendation letters to the potential candidates for the 
Niigata and Toyama gubernatorial elections at LDP headquarters, with 
Secretary General Ibuki, Election Committee Chairman Koga, and 
others present. Attended an executive meeting. 
 
10:01 
Attended a meeting of the global warming taskforce at the Kantei. 
Later, met Foreign Minister Koumura. Attended a cabinet meeting. 
Health, Labor and Welfare Minister Masuzoe stayed behind. 
 
10:54 
Met Mark Kelly, the commander of the space shuttle Discovery, and 
other astronauts. 
 
11:10 
Met members of the Chinese Youth People's Association. Followed by 
Internal Affairs Minister Masuda. 
 
12:28 
 
TOKYO 00002075  003 OF 011 
 
 
Met Machimura. 
 
13:39 
Met U.S. Ambassador Schieffer. 
 
14:36 
Attended a ceremony to present certificates for environment-friendly 
model cities. 
 
15:50 
Attended a meeting of the Council on Economic and Fiscal Policy. 
 
16:36 
Attended a cabinet meeting. Later met Deputy Chief Cabinet Secretary 
Futahashi. 
 
17:05 
Met Special Advisor Ito. Followed by former Foreign Minister 
Nakayama. 
 
18:15 
Met Machimura. 
 
18:49 
Returned to his official residence. 
 
4) U.S. envoy hopes for Japan's continued refueling mission 
 
TOKYO SHIMBUN (Page 2) (Full) 
July 30, 2008 
 
Prime Minister Fukuda met with U.S. Ambassador to Japan Schieffer at 
his office yesterday and exchanged views over the Self-Defense 
Forces' activities for international contributions, including the 
Maritime Self-Defense Force's refueling mission in the Indian Ocean 
and the Air Self-Defense Force's assistance to Iraqi 
reconstruction. 
 
After the meeting, Schieffer told reporters, "We hope Japan will 
continue its contributions to realize a peaceful Afghanistan and a 
peaceful Iraq." With this, he clarified that the United States 
strongly hopes for the SDF's continued contributions. 
 
5) New antiterrorism law certain to expire; New Komeito rejects 
re-adoption, casting pall over international contributions 
 
SANKEI (Top play) (Excerpts) 
July 30, 2008 
 
It has become nearly certain that the new Antiterrorism Special 
Measures Law, the legal basis for the Maritime Self-Defense Force's 
refueling operation in the Indian Ocean, will expire next January. 
The reason is that the New Komeito, which is calling for the 
convocation of an extraordinary Diet session in late September, has 
decided not to go along with the coalition's use of a two-thirds 
House of Representatives override vote to pass the legislation with 
an eye on a Lower House dissolution before the end of the year. 
Additionally, the LDP Upper House leadership has begun echoing the 
New Komeito's decision. Now that the government has decided to put 
an end to the Air Self-Defense Force's activities in Iraq before the 
end the year, the expiration of the antiterrorism law is certain to 
take a toll on the Japan-U.S. alliance. The MSDF's withdrawal, which 
 
TOKYO 00002075  004 OF 011 
 
 
is likely to have a serious impact on the framework of Operation 
Enduring Freedom - Maritime Interdiction Operation (OEF-MIO), is 
expected to draw fire from the international community. 
 
Majority leaned toward suspension 
 
Defense Minister Shigeru Ishiba, in an LDP national defense joint 
meeting on the morning of July 29, underlined the importance of the 
MSDF's refueling operation, saying: "The war on terrorism is at a 
crucial stage. The question here is if Japan truly has a sense of 
being involved in this war." Some attendants echoed Ishiba, with 
Upper House member Masahisa Sato asking, "Should a contingency occur 
in the Strait of Hormuz from an outrageous act by Iran, who will 
assist Japan with the transport of crude oil?" 
 
 
In an LDP General Council meeting, Upper House member Ichita 
Yamamoto said: "If China joins the war on terrorism in Afghanistan, 
Japan's image would be damaged immeasurably on the security and 
diplomatic fronts." But no one subscribed to Yamamoto's view. The 
prevailing view in the LDP is that the suspension of the MSDF 
activities cannot be helped. 
 
Since a supply vessel was dispatched in January this year, the MSDF 
has contributed to measures against terrorism and piracy, proving a 
total of 5,475 kiloliters of fuel through 32 occasions to vessels of 
such countries as the United States, Britain, France, and Pakistan. 
 
The continuation of the MSDF operation requires amendments to the 
Antiterrorism Law in the extraordinary Diet session. Chances are 
slim that the opposition parties, including the Democratic Party of 
Japan, which opposed the legislation in last year's extraordinary 
Diet session, will reverse their position and support the law's 
extension. 
 
Further, with a Lower House dissolution before the end of the year 
in mind, New Komeito has announced its opposition to the Lower House 
readopting the legislation, with Secretary General Kazuo Kitagawa 
saying, "Conducting thorough discussion between the ruling and 
opposition camps in order to obtain the opposition bloc's 
understanding is our priority." Winning a two-thirds majority in the 
Lower House without the New Komeito's cooperation is impossible. The 
option of readopting the legislation in the lower chamber has 
effectively been sealed off. 
 
New Komeito is also calling for the convocation of an extraordinary 
Diet session in late September instead of in late August, which 
makes it difficult to secure enough deliberation time. With an eye 
on the U.S. presidential race in November, a former cabinet minister 
said, "I wonder if we should amend the law by putting the 
administration out on the line at a time when the future of 
America's security policy remains unclear." 
 
6) Opposition bloc mission from Okinawa Prefectural Assembly visits 
American Embassy in Japan and other offices to call for halt in 
building new base 
 
SHIMBUN AKAHATA (Page 4) (Full) 
July 30, 2008 
 
A delegation consisting of representatives from the opposition bloc, 
including the Japan Communist Party (JCP), of the Okinawa 
 
TOKYO 00002075  005 OF 011 
 
 
Prefectural Assembly yesterday visited Tokyo in order to request of 
the Diet, U.S. Embassy in Japan, and U.S. Forces Japan headquarters 
that the contents of the assembly's opinion paper and resolution 
opposing the building of a new base at Henoko in Nago City, adopted 
at a regular meeting of the assembly by majority made up of 
opposition parties, be implemented. 
 
The mission consisted of five assembly members including Masaaki 
Maeda of the JCP. On the same day, the request was made at the U.S. 
Embassy in Tokyo and the U.S. Forces Japan Headquarters at Yokota 
Air Base. 
 
The mission made this appeal: "The realignment of U.S. forces in 
Japan was an arbitrary decision made by the Japanese and U.S. 
governments. The view of most of the prefectural residents is to 
protect our beautiful sea. They are opposed to any building of new 
bases." 
 
At the U.S. Embassy, they were received by Security Policy Chief Ray 
Greene. According to the delegation, Greene reportedly stated, "If 
the relocation to the Henoko district is not realized, none (of the 
realignment plan) will go forward." 
 
7) Gov't to subsidize Zama for USFJ realignment 
 
YOMIURI (Page 4) (Abridged) 
July 30, 2008 
 
The Defense Ministry decided yesterday to subsidize the city of Zama 
in Kanagawa Prefecture over the planned realignment of U.S. forces 
in Japan. Zama had opposed the U.S. Army's planned relocation of its 
1st Corps' forward-deployed headquarters to Camp Zama, a U.S. 
military base in the city. But the city has now agreed to set up a 
consultative body with the government over the U.S. military's 
realignment. In response, the Defense Ministry made the decision. 
All 39 municipalities will now be subsidized in return for their 
acceptance of U.S. force realignment plans. 
 
The Defense Ministry yesterday proposed setting up a consultative 
body for the government and base-hosting localities to discuss how 
to alleviate local burdens along with the U.S. force realignment. 
Zama agreed to the proposal. 
 
8) MSDF drills likely to be called off due to rising fuel prices 
 
TOKYO SHIMBUN (Page 3) (Full) 
July 30, 2008 
 
The Maritime Self-Defense Force is scheduled to carry out annual 
training exercises this fall. In this regard, MSDF Chief of Staff 
Keiji Akahoshi told the press yesterday that the MSDF would have to 
consider downscaling or calling off the scheduled training exercises 
in the wake of rising fuel costs. 
 
The MSDF annually carries out large-scale training exercises with a 
full-fledged lineup of vessels and airplanes participating. The 
MSDF's annual training exercises were not called off even in the 
face of the oil crises in the 1970s. If the exercises are called 
off, it would be the first case since 1954. 
 
9) Defense white paper outlined 
 
 
TOKYO 00002075  006 OF 011 
 
 
TOKYO SHIMBUN (Page 2) (Full) 
July 30, 2008 
 
The Defense Ministry yesterday completed an outline of its white 
paper for 2008 and presented it to the ruling Liberal Democratic 
Party at a joint meeting of its defense-related divisions. The white 
paper has four themes, including the Defense Ministry's plan to 
reform itself. In this regard, the white paper lists the Defense 
Ministry's proposals and efforts to prevent scandals and restructure 
its organization. The Defense Ministry will present a report on it 
at a cabinet meeting in late August. 
 
The white paper introduces an outline of a government advisory 
panel's recent report regarding the Defense Ministry's reform. Based 
on an analysis of scandals in the past, the white paper underscores 
the importance of following the rules and specifies a restructuring 
plan to integrate the Defense Ministry's bureaucracy and the 
Self-Defense Forces' staff offices. 
 
10) Fukuda to use SDF aircraft to attend Beijing Olympics opening 
ceremony 
 
ASAHI (Page 2) (Full) 
July 30, 2008 
 
It was decided yesterday that Prime Minister Yasuo Fukuda will use 
an Air Self-Defense Force U-4 multipurpose support plane in order to 
attend the Beijing Olympics opening ceremony on August 8. It will be 
the first time for an ASDF aircraft, not a government plane, to land 
in China. 
 
The size of the entourage traveling with the prime minister will be 
smaller than a regular foreign trip and the flight distance will be 
short. Given the situation, the government has decided to use the 
U-4 19-seat transport aircraft, which has a shorter flight range 
than the 150-seat government plane. The government is now arranging 
a time for a U-4 test flight with China. 
 
In June 2007, then Foreign Minister Taro Aso also used a U-4 in his 
one-day trip to Jeju Island, South Korea. Fukuda will be the first 
prime minister to use a U-4 for a foreign trip. 
 
11) North Korea asserts at Six-Party Talks that it still needs more 
stages before it is denuclearized 
 
ASAHI (Page 2) (Excerpt) 
July 30, 2008 
 
(Seoul)  It has been learned that North Korea during the Six-Party 
Talks by the heads of the delegations held in Beijing July 10-12, 
asserted that before it reaches the "third stage" that aims at 
complete elimination of its nuclear programs, it "still needs one or 
two more stages." This was revealed in a speech in Seoul given by 
the chief ROK delegate to the talks. 
 
North Korea aims at each stage of eliciting in return economic 
assistance and other measures, and has been stalling for time in 
order that the pace of moving toward denuclearization will slow 
down. 
 
12) South Korean Prime Minister visits Takeshima for first time, 
aiming to avert criticism of government as "weak-kneed" 
 
TOKYO 00002075  007 OF 011 
 
 
 
TOKYO SHIMBUN (Page 7) (Excerpts) 
July 30, 2008 
 
(Kaname Fukuda, Seoul) 
 
South Korean Prime Minister Han Seung Soo visited the Takeshima 
islets, called Dokdo in South Korea, on July 29. He is the first 
South Korean prime minister to visit the islets. By going there, he 
aimed to counter recent moves by Japan and the U.S. in connection 
the territorial dispute and to underscore to domestic and foreign 
audiences that Seoul is in effective control of the islets. 
Suffering from low public support, the ROK administration led by 
President Lee Myung-bak seems to have been trying to take a tough 
stance in the dispute in order to avert public criticism of its 
being "weak-kneed." 
 
According to the South Korean media, Han met security squad members 
stationed on the islets and spoke words of encouragement. He also 
set up a stone signpost marking, "Our land, Dokdo." He emphasized: 
"With this visit, we must impress the world that Dokdo is South 
Korea's territory." 
 
The Navy, Air Force, and Naval Police will start a three-day drill 
in the sea off the islets on July 30 on the assumption of an 
invasion of the Takeshima islets by foreign vessels. Drills have 
been carried out from before, but the South Korean government is 
willing to play up its determination to protect its territory 
through the new exercise. 
 
13) Fukuda-Ota meeting tomorrow 
 
SANKEI (Page 2) (Full) 
July 30, 2008 
 
Prime Minister Yasuo Fukuda has decided to hold a meeting on July 31 
with New Komeito leader Akihiro Ota to discuss the timing of a 
cabinet shuffle and the opening of an extraordinary Diet session. He 
is expected to tell Ota that he will shuffle his cabinet as early as 
August 4. Fukuda aims to convene the extra session in late August, 
but the New Komeito has called for opening it in late September. 
 
The ruling Liberal Democratic Party (LDP) and New Komeito will hold 
a meeting today of their secretaries general and Diet affairs 
committee chiefs. In the meeting, the timetable for the Fukuda-Ota 
meeting will be confirmed. The LDP will hold an emergency executive 
meeting tomorrow to finalize the future political schedule. There is 
a view in the LDP that a shuffle of the executive members will be 
carried out on August 3. 
 
14) Foreign Minister Koumura puts off visit to Sri Lanka, India, 
Uzbekistan 
 
MAINICHI (Page 2) (Full) 
July 30, 2008 
 
The Foreign Ministry announced last night that Foreign Minister 
Masahiko Koumura has foregone a trip to Sri Lanka, India, and 
Uzbekistan August 1-8. In the government and ruling coalition, there 
is a view that Prime Minister may shuffle his cabinet on August 4. 
Koumura, therefore, appears to have put off the planned 
three-country tour for that reason. 
 
TOKYO 00002075  008 OF 011 
 
 
 
A Foreign Ministry source said: "It is not that the Prime Minister 
instructed him to put it off; the Foreign Minister himself made that 
decision, and we thought that it would be better to inform the three 
countries of our decision as early as possible." 
 
Koumura said at a press conference yesterday morning: "I want to 
make a decision on (whether to visit the three countries) after 
considering external and internal matters." 
 
15) On timing of extra Diet session, Fukuda eyes late August while 
ruling members call for late September 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
July 30, 2008 
 
Prime Minister Yasuo Fukuda has kept silent on the possibility of a 
cabinet shuffle, as well as on the timing for opening an 
extraordinary Diet session. Fukuda's cautious stance reflects his 
judgment that the timing for opening the session will affect his 
administration's fate. Will the session be convened in late August 
or in late September? Fukuda and ruling party members, while also 
keeping a possible Lower House dissolution in mind, now have 
slightly different ulterior motives. 
 
On June 20, when the ordinary Diet session ended in effect, Fukuda 
declared that he would convene an extraordinary Diet session at an 
early date. 
 
"The session is usually convened in September but might open a 
little earlier this year. Everyone must have the same view." In 
response, the government and the ruling camp started preparations 
for convening the session on Aug. 22 or 25. 
 
Fukuda aims to extend the new antiterrorism special measures law 
beyond its Jan. 15 expiration in order to have the Maritime Self 
Defense Force (MSDF) continue its refueling mission in the Indian 
Ocean. 
 
The government enacted the said law by extending the extraordinary 
Diet session last year, which opened on Sept. 10, to the following 
year and taking an override vote in the Lower House.  To avoid a 
recurrence of such confusion, the government judged it necessary to 
open the session earlier than usual. 
 
However, when the prime minister was on summer vacation, ruling 
party members began to move to modify the government's plan. 
 
A senior New Komeito member grumbled to his aide on July 18: "Don't 
assume that the session will open in late August." Around that time, 
a senior House of Councillors member of the Liberal Democratic Party 
also said, with attacks by the opposition camp in the Diet in mind: 
"The less time we spend on the defense, the less we will be 
attacked." 
 
Calls for the session in September were not only part of their Diet 
strategy. Delivering a speech on July 23, LDP Election Committee 
Chairman Makoto Koga expressed his caution about convening the 
session in August on the premise of passing the bill extending the 
MSDF mission by taking an override vote in the Lower House. He also 
said: "For the next general election, any other timing than early 
next year is inconceivable." 
 
TOKYO 00002075  009 OF 011 
 
 
 
Those who are calling for the session opening in September eye a 
general election early next year in a bid to avoid forcible 
management of the Diet session, which would inevitably result in a 
setback to the government. They are not obsessive about passing the 
bill extending the refueling mission. 
 
A mid-ranking New Komeito member said: "Our party is eyeing (Lower 
House dissolution in) January." In response, a former cabinet member 
said: "The New Komeito will no longer agree on the override-vote 
approach." This view is gaining influence in the LDP. 
 
Fukuda is still willing to pass the bill extending the MSDF mission 
as part of Japan's international contributions. If the prime 
minister gives up on his plan to open the session in August and on 
the passage of the said bill under pressure from the ruling camp, he 
will rapidly lose his grip on the party. Even so, if he insists on a 
Lower House convocation in August, friction will occur between him 
and the ruling camp. Now that people in the ruling camp have voiced 
doubts about their chances of winning a Lower House election under 
the premier, Fukuda must be willing to avoid friction. 
 
16) Fukuda's policy imprint cannot be seen in social welfare plan 
 
MAINICHI (Page 2) (Slightly abridged) 
July 30, 2008 
 
The government's emergency social welfare program, called the "five 
step relief plan," was revealed yesterday. It was compiled under 
instructions from Prime Minister Yasuo Fukuda, who has been 
increasingly alarmed by public criticism of the pension-record 
fiasco and the controversial health insurance system for people aged 
75 and over. However, the government only had one month to ready the 
plan, since it was only announced on June 23. The plan includes many 
existing policy measures and lacks fiscal backing. Nor can the 
policy imprint of the Prime Minister be clearly seen in the set of 
emergency measures to improve the social welfare system. 
 
Fukuda told reporters last night: "The public's anxiety about the 
future and its distrust of government must be eliminated." 
 
Fukuda ordered the compilation of an emergency plan in mid-May. Due 
to the public's dissatisfaction with the health welfare system for 
those aged 75 and older, the cabinet support rate dropped to below 
20 PERCENT  a poll conducted by the Mainichi Shimbun. Fukuda 
consulted only with former Chief Cabinet Secretary Kaoru Yosano and 
Special Advisor to the Prime Minister Tatsuya Ito on the plan. He 
did not say anything to concerned cabinet ministers. He wrote up a 
draft on a flight from Okinawa to Tokyo immediately his press 
conference on June 23. 
 
Timetable for the five step plan to ease public anxieties 
 
? Policies for the elderly (support companies that hire people aged 
65 or older, which would be reflected in fiscal 2009 budget; and 
review the pension system for the working elderly, with the 
government considering the submission of a bill to the next regular 
Diet session). 
? Medical services (increase financial support to doctors who have 
been sent to remote areas, which would be reflected in fiscal 2009 
budget; and financial assistance to medical institutions that have 
many patients, which would be reflected in the fiscal 2009 budget). 
 
TOKYO 00002075  010 OF 011 
 
 
? Support for child-rearing (establishing of "child subsidy", which 
would be reflected in FY2009 budget; a bill to create a 
"child-rearing mom" system, on which the government would submit a 
bill to the next extraordinary Diet session). 
? Policies for irregular workers (support "Internet cafe refugees," 
which would be reflected in FY2009 budget; expanding the application 
of social insurance. 
? Reform of the Health, Labor and Welfare Ministry (establish an 
experts panel, who would hold a first meeting on August 1 and would 
come up with an interim repot within the year). 
 
17) Structural reform drive losing steam, meeting number of 
setbacks, including pork-barrel budget allocations, postponement of 
burden sharing, strengthening of regulations 
 
NIKKEI (Page 2) (Excerpts) 
July 30, 2008 
 
Moves to counter the reform policy line set by the Koizumi cabinet 
can be seen one after the other in the government and the ruling 
parties, including pork-barrel budgetary allocations, postponement 
of burden sharing, and the strengthening of regulations. These 
efforts give a strong impression of being intended to counter the 
Democratic Party of Japan (DPJ or Minshuto), since the next Lower 
House election could occur anytime soon. The Fukuda cabinet has 
managed to maintain a spending-cut policy line in the compilation of 
budget request guidelines for fiscal 2009. However, its reform 
policy line is beginning to fray at the edges. 
 
The government and the ruling parties on July 29 adopted a set of 
additional measures to address the surging crude oil prices, 
centered around a government plan to compensate commercial fishermen 
for their increased fuel expenses. The package is attached with a 
condition that recipients make an energy-saving effort in a group 
consisting of more than five. However, a senior official of one 
fishing industry organization was surprised at the government 
assistance, saying, "To be honest, I have never expected that the 
government would go to this extent." 
 
Nightmare of Upper House election 
 
The government plans to draw the necessary money from an existing 
8-billion-yen fund, instead of using new resources. However, 
fisheries policy experts are in high spirits with Yasukazu Hamada, 
chairman of the comprehensive fisheries research commission, noting, 
"If we quickly use up the fund, it would make it easy for us to call 
for the compilation of a supplementary budget." Mikio Aoki, former 
head of the LDP caucus in the Upper House, said, "8 billion yen 
means infinite." Machimura hinted at a possibility of an early 
compilation of a supplementary budget, noting, "If we determine that 
there is a shortfall in budgetary funds, we will cope with the 
situation swiftly and flexibly." 
 
What is driving the ruling party to go through such efforts is 
election driven: the expiration of the term of office of members of 
the Lower House late next year and the DPJ's moves in the run-up to 
the next Lower House election. 
 
The DPJ in June proposed 100 billion yen worth of measures to 
address the steep rise in crude oil prices. Nobutaka Tsutsui, the 
agriculture minister of the "Next Cabinet" said, "80 billion yen is 
insufficient." He underscored his party's plan to expand in its 
 
TOKYO 00002075  011 OF 011 
 
 
manifesto for the next Lower House election the household income 
compensation system for farmers, released for the Upper House 
election last year, to cover the fisheries, forestry and livestock 
industries, as well. Such a move by the DPJ reminds the LDP of its 
crushing defeat in the Upper House election. The LDP was criticized 
during the Upper House election campaign as abandoning the rural 
areas and as a result, it suffered a devastating defeat in such 
constituencies. 
 
The ruling camp also lost a seat in the by-election in the Yamaguchi 
No. 2 Constituency held this spring. It is viewed that the 
introduction of the public health insurance scheme for elderly 
people aged 75 or older was the reason for the defeat. Following the 
defeat, the LDP and the New Komeito have decided to put a moratorium 
on the hike in over-the-counter payment of medical treatment fees 
paid by elderly people in the 70-74 age bracket, even though it was 
scheduled to be implemented in April 2009. Moves to put off the 
ruling camp's election pledge to raise the proportion of state 
contribution to the basic pension starting in fiscal 2009 are also 
appearing. 
 
SCHIEFFER