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UNCLAS SECTION 01 OF 10 TOKYO 002369 
 
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: JAPANESE MORNING PRESS HIGHLIGHTS 08/29/08 
 
Index: 
 
1) Top headlines 
2) Editorials 
 
Afghan assistance: 
3) -- Foreign Minister Koumura expresses intention to continue MSDF 
refueling mission in the Indian Ocean (Nikkei) 
4) -- LDP, New Komeito will start full-scale coordination next week 
on bill extending the MSDF refueling mission in the Indian Ocean 
(Nikkei) 
5) -- Government gives up on plan to send SDF to mainland 
Afghanistan and may even shrink current human contributions (Tokyo 
Shimbun) 
6) -- Government determined to continue Afghan assistance despite 
slaying of NGO worker (Sankei) 
7) -- Taliban intends to drive all foreign aid workers out of 
Afghanistan, says spokesman (Mainichi) 
8) -- Japanese NGO bringing back most aid workers following slaying 
of Kazuyo Ito (Nikkei) 
 
9) Defense Minister Hayashi to visit Washington early next month 
(Nikkei) 
 
Political scene: 
10) -- Ozawa states intention of running again for DPJ presidential 
seat (Mainichi) 
11) -- Three Upper House DPJ lawmakers bolt party to form "Reform 
Club" group with two other lawmakers (Yomiuri)    8 
12) -- DPJ suffers blow with loss of three Upper House lawmakers 
(Tokyo Shimbun) 
13) -- New splinter party to link up policy-wise with LDP in the 
Diet (Sankei) 
 
Economic agenda: 
14) -- Comprehensive economic package will be finalized today, 
containing projects on a 10-trillion yen scale (Nikkei) 
15) -- Government plans supplementary budget worth 1.7 trillion yen, 
but will not issue deficit bonds to fund it (Sankei) 
 
There will be no Morning Highlights on September 1 - an American 
holiday. 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Torrential rain hits Kanto, Tokai regions 
 
Mainichi: 
Ruling parties agree on 50 PERCENT premium for overtime work 
exceeding 60 hours 
 
Yomiuri: 
DPJ rebels, others form new party named "Kaikaku Kurabu" headed by 
Hideo Watanabe 
 
Nikkei: 
Economic stimulus package totals 10 trillion yen 
 
Sankei: 
 
TOKYO 00002369  002 OF 010 
 
 
Government to set supplementary budget at 1.7 trillion yen with no 
deficit-covering bonds 
 
Tokyo Shimbun: 
FY2009 state budget set to hit 86.13 trillion yen 
 
Akahata: 
METI, FSA eye making corporate overseas gains tax-free 
 
2) EDITORIALS 
 
Asahi: 
(1) Lower House Speaker Kono's candid remarks impressive 
(2) New eco-cars packed with high technology 
 
Mainichi: 
(1) Shortage of doctors requires thorough discussion 
(2) Sluggish real estate market: Questions raised about financial 
institutions 
 
Yomiuri: 
(1) DPJ leadership race: Ozawa must present responsible policy 
(2) Japan needs to keep up efforts on Afghan stability 
 
Nikkei: 
(1) Death of Kazuya Ito regrettable 
(2) Sound ASEAN policy essential 
 
Sankei: 
(1) Look squarely at reality of terrorism 
(2) Gas prices: Wholesale system needs more transparency 
 
Tokyo Shimbun: 
(1) No concession allowed on North Korean nuclear verification 
(2) Employment and Human Resources Development Organization must not 
be disbanded 
 
Akahata: 
(1) New antiterrorism law must not be extended despite U.S. 
pressure 
 
3) Japan willing to continue refueling: Koumura 
 
NIKKEI (Page 2) (Full) 
August 29, 2008 
 
Foreign Minister Masahiko Koumura held a telephone conversation with 
Afghan Foreign Minister Sepanta yesterday afternoon, during which 
Koumura indicated that Japan strongly intends to continue the 
Maritime Self-Defense Force's current refueling activities in the 
Indian Ocean. "We will have to continue our efforts as far as we can 
for Afghanistan's peace and reconstruction," Koumura told Sepanta. 
 
Kazuya Ito, a nongovernmental organization member, was recently 
abducted and killed in Afghanistan. In the wake of this incident, 
Koumura asked Sepanta to cooperate on the security of Japanese 
nationals working in Afghanistan to assist with its reconstruction. 
"Taking this opportunity," Koumura said, "we condemn such mean 
criminal acts as kidnapping and killing as well as all sorts of 
terrorism. He added, "We're determined anew to fight against 
terrorism." 
 
 
TOKYO 00002369  003 OF 010 
 
 
Sepanta told Koumura, "The biggest answer to the incident is to push 
for cooperation between our two countries and reduce the occurrence 
of terrorism." He added, "We want to continue our cooperation." 
 
4) Ruling coalition to begin coordination next week on MSDF bill 
 
NIKKEI (Page 2) (Full) 
August 29, 2008 
 
Taku Yamasaki, chairman of the ruling Liberal Democratic Party's 
Research Commission on Foreign Affairs, indicated yesterday that the 
LDP would enter into full-fledged coordination next week with its 
coalition partner, the New Komeito, over how to handle a bill 
extending the Maritime Self-Defense Force's current refueling 
activities in the Indian Ocean, a point of contention in the next 
extraordinary Diet session. The LDP and the New Komeito will hold a 
meeting of their project team to discuss the bill's contents. 
 
Yamasaki, who is responsible on the LDP side for the ruling 
coalition's project team, stressed: "This is a very important bill. 
Depending on the outcome, the political situation will be greatly 
affected." From the New Komeito, Policy Research Council Natsuo 
Yamaguchi will attend. 
 
The MSDF's refueling activities in the Indian Ocean have been 
conducted under the new Antiterrorism Special Measures Law, which is 
set to expire in January next year. In order for Japan to extend the 
MSDF's refueling mission there, the MSDF bill needs to clear the 
Diet in its extraordinary session to be convened Sept. 12. The 
government insists on the necessity of continuing the MSDF's 
refueling activities in order to back up the war on terror in 
Afghanistan. Prime Minister Yasuo Fukuda told Defense Minister 
Yoshimasa Hayashi to make an appeal on the importance of the MSDF's 
refueling activities. 
 
The New Komeito remains reluctant to take a second vote in the House 
of Representatives to override the opposition-dominated House of 
Councillors' potential rejection of the bill since such an override 
could have a negative impact on the next election for the House of 
Representatives. The government once considered sending the 
Self-Defense Forces to Afghanistan but has now forgone this SDF 
dispatch option in view of the local security situation going from 
bad to worse. However, a Japanese volunteer from a nongovernmental 
organization was killed recently in Afghanistan. Due to this 
incident, the deteriorating security situation in Afghanistan is 
again drawing public attention. "The public may strongly oppose the 
refueling activities," a government source said. 
 
The MSDF's refueling mission was once called off in November 2007 
but resumed in February with a new law enacted. After that, the MSDF 
provided fuel amounting to approximately 6,925 kiloliters through 
the end of July. 
 
5) Gov't gives up on SDF Afghan dispatch 
 
TOKYO SHIMBUN (Page 2) (Full) 
August 29, 2008 
 
The government yesterday gave up on the possibility of sending the 
Self-Defense Forces to Afghanistan for the purpose of assisting that 
country with its reconstruction efforts. Kazuya Ito, a member of 
Peshawar-kai, a nongovernmental organization, was slain by an armed 
 
TOKYO 00002369  004 OF 010 
 
 
group in Afghanistan. In response to this incident, the government 
now considers the local security situation as going from bad to 
worse. Meanwhile, the Japan International Cooperation Agency (JICA) 
and NGOs are going to downscale their assistance activities in 
Afghanistan. The killing of the Japanese NGO aid worker is forcing 
the government to make a substantial review of Japan's humanitarian 
and reconstruction assistance to Afghanistan. 
 
Chief Cabinet Secretary Nobutaka Machimura, meeting the press 
yesterday, said the government had not decided to take up the option 
of sending SDF troops to Afghanistan. Machimura also referred to the 
possibility of downscaling JICA activities in Afghanistan. Machimura 
stated, "We will discuss what to do from now on, while watching the 
local situation, and then the government will make a judgment." 
 
Meanwhile, Machimura also declared that the government would present 
a bill to the Diet at its forthcoming extraordinary session, seeking 
to extend the new Antiterrorism Special Measures Law, which will 
expire in January next year, in order to continue the Maritime 
Self-Defense Force's refueling activities in the Indian Ocean. "If 
we drop out from the line of battle in the war on terror, it would 
run counter to the international community's efforts," he stressed. 
 
In June this year, the government sent a fact-finding survey to 
Afghanistan for the purpose of looking into the feasibility of 
sending SDF troops there. The government was exploring the 
possibility of engaging heavy-lift helicopters and C-130 transport 
planes in airlift services. However, this SDF Afghan dispatch was 
deemed to be difficult from the first, because the New Komeito, the 
ruling Liberal Democratic Party's coalition partner, has been 
extremely reluctant to consider it. 
 
6) Government determined to continue aid for Afghanistan in fighting 
terrorism, despite slaying of aid worker 
 
SANKEI (Page 3) (Full) 
August 29, 2008 
 
Chief Cabinet Secretary Nobutaka Machimura told reporters in 
connection with the slaying of kidnapped aid worker Kazuya Ito in 
Afghanistan: "A precious sacrifice was made, but the incident might 
have the people feel strongly that Japan's continued proactive 
involvement in the war on terror is important." He indicated that it 
has become more necessary to continue the Maritime Self-Defense 
Force's refueling mission in the Indian Ocean. 
 
Machimura also referred to a bill extending the New Antiterrorism 
Special Measures Law beyond its Jan. 15 expiration: "We will welcome 
amendments to the bill if they are constructive and acceptable for 
both ruling and opposition parties." 
 
Prime Minister Yasuo Fukuda also emphasized in the Kantei's email 
magazine dated yesterday: "Conflicts are going on in various areas 
across the world right now, and many people are suffering from 
poverty. Japan should offer a helping hand to such areas and people. 
That is to respond to Mr. Ito's wishes and is the role Japan should 
play as a peace-cooperation nation. 
 
Foreign Minister Masahiko Koumura held a teleconference with his 
Afghan counterpart yesterday. He said: "We are determined to 
continue to oppose all terrorist activities and fight terrorism." 
Asked about Afghan reconstruction assistance, Koumura said: "Japan 
 
TOKYO 00002369  005 OF 010 
 
 
must continue to make utmost efforts." 
 
7) Taliban spokesman denounces NGO reconstruction projects, saying 
that the kidnapping was carried out to halt them 
 
MAINICHI (Page 2) (Abridged slightly) 
August 29, 2008 
 
Shinichi Kurita, Kabul 
 
In the wake of the discovery in eastern Afghanistan of the body of 
Kazuya Ito, 31, of the Japanese nongovernmental organization 
Peshawar-kai, a Taliban spokesman told the Mainichi Shimbun on Aug. 
28: "The group of kidnappers abducted him at the order of the 
Taliban. They initially did not know that he was Japanese." 
 
He also indicated that after Ito was identified as Japanese, the 
Taliban intended to make the Japanese government suspend its all 
assistance for the reconstruction of Afghanistan, adding that the 
Taliban did not order the group to kill him. The spokesperson is one 
of the Taliban's public relations officers. He has handled media 
inquiries about fighting with the U.S. military in the eastern part 
of the country and other events. On Aug. 26, he told the Mainichi 
Shimbun and other local news organizations that his group had killed 
a Japanese national. 
 
As the reason why the Taliban ordered the kidnapping, he said: "We 
intended to force the dam construction project to be halted, and we 
demand foreign governments stop providing assistance to the Afghan 
government and the United States." The spokesperson also condemned 
the Peshawar-kai's reconstruction assistance projects, saying: "We 
know the organization. We endorse food assistance, such as rice, 
wheat and cooking oil, but not structures like roads, schools and 
dams that alter land features and culture." 
 
8) Peshawar-kai considering recalling all Japanese aid workers 
 
NIKKEI (Page 43) (Excerpts) 
August 29, 2008 
 
In the wake of the kidnapping and slaying of Kazuya Ito, the 
Fukuoka-based NGO Peshawar-kai, to which Ito belonged, announced in 
a press conference in the city yesterday afternoon that it will 
recall eight Japanese aid workers to Japan from Afghanistan. The 
group will consider recalling its five aid workers in Pakistan as 
well. 
 
The group's secretary general, Mitsuji Fukumoto, 60, said in the 
press conference: "We cannot afford to lose another life." The 
workers in Afghanistan are expected to return home in two to three 
weeks. Although exactly when the five workers in Pakistan can leave 
the country is unclear, chances are high that they, too, will return 
home due to the deteriorating situation, according to Fukumoto. 
 
Fukumoto also indicated that the group would not send its workers 
back to those countries unless the security situations are confirmed 
to have improved and that the group's activities will have to be 
carried out mainly by local residents. Tetsu Nakamura, a doctor who 
heads the projects in Afghanistan, will continue directing the 
projects. A formal decision will be made in a directors' meeting. 
 
9) Coordination underway for Defense Minister Hayashi to visit U.S. 
 
TOKYO 00002369  006 OF 010 
 
 
in early September 
 
NIKKEI (Page 2) (Full) 
August 29, 2008 
 
Defense Minister Yoshimasa Hayashi yesterday began coordination with 
the possibility of visiting the United States in early September to 
meet with his U.S. counterpart Robert Gates. Hayashi is expected to 
explain ahead of the opening of the extraordinary Diet session on 
Sept. 12 the Japanese government's policy of continuing the Maritime 
Self-Defense Force's refueling operation in the Indian Ocean and 
seek understanding from the U.S. side. 
 
10) Ozawa to run in DPJ presidential race; New DPJ leadership to 
decide whether to accept three lawmakers' resignations 
 
MAINICHI (Page 1) (Full) 
August 29, 2008 
 
Three House of Councillors members belonging to the Democratic Party 
of Japan (DPJ) -- Hideo Watanabe, Yasuhiro Oe and Yumiko Himei -- 
yesterday afternoon submitted their resignations to DPJ Secretary 
General Yukio Hatoyama. Later in the day, the three lawmakers along 
with two other Upper House independent members, Hiroyuki Arai and 
Shinpei Matsushita, presented a notification of creating a new 
party, which they call the "Reform Club," to the Ministry of 
Internal Affairs and Communications. Last night at a hotel close to 
the Diet building, the five lawmakers exchanged views on a press 
conference they will hold today to formally announce the creation of 
the new party. 
 
DPJ President Ichiro Ozawa and party executive members discussed 
yesterday how they should respond the matter. They decided to leave 
a decision on the matter to the new party leadership, which will be 
inaugurated on Sept. 21, when Ozawa is reelected as president, not 
accepting the resignations now. 
 
Indicating that the party should not accept their resignations, 
Deputy President Naoto Kan told the press yesterday: "If they leave 
the party, they must resign as Diet members to fulfill their 
obligations for the public." 
 
In his meeting with senior party members, Ozawa revealed his 
intention to run in the party leadership race, which will take place 
on Sept. 21. The official campaign for the Sept. 21 election will 
start on Sept. 8. Ozawa told them: "I want to announce my candidacy 
before Sept. 1, when the party holds an explanatory meeting for 
candidates." He then sought their cooperation to collect 20 
recommendations by Diet members, the figures that are necessary for 
a candidate to run in a presidential race. Hatoyama told reporters: 
"We appreciate that those who wanted to run in the race will give 
their recommendations to him." 
 
Ozawa and other party executives discussed the party's response to 
the upcoming extraordinary Diet session to be convened on Sept. 12. 
They confirmed that the party would not basically accept the ruling 
coalition's idea of holding each party's representative 
interpellations in both chambers of the Diet for Sept. 16-18. 
 
11) DPJ renegades form new party, headed by Watanabe 
 
YOMIURI (Top Play) (Excerpts) 
 
TOKYO 00002369  007 OF 010 
 
 
August 29, 2008 
 
Three Democratic Party of Japan (DPJ) members - Hideo Watanabe, 
Yasuhiro Oe, and Yumiko Himei - submitted their resignation to 
Secretary General Hatoyama yesterday. Later, they notified the 
Ministry of Internal Affairs through the Tokyo Metropolitan 
Electoral Management Committee of their formation of a new party 
called "Reform Club." Their notice was accepted. Hiroyuki Arai and 
Shinpei Matsushita have also joined the new party, and Watanabe is 
expected to head the party. This new development will inevitably 
affect the DPJ's party management and approach to Diet business. 
 
As the main reason for their departure from the main opposition 
party, the three cited President Ozawa's party management. They are 
expected to lean toward the government and the ruling camp. Oe told 
reporters yesterday afternoon: "I harbored doubt over the party's 
policy stance that since the DPJ is in the opposition, it naturally 
opposes things. Many in the DPJ still take such a view." He thus 
indicated the new party will call on DPJ members to join the party. 
 
The party leadership, including Ozawa, Deputy President Kan, and 
Secretary General Hatoyama, met at party headquarters yesterday and 
decided not to accept their resignations for the time being, leaving 
the decision to the new management to be launched after an 
extraordinary party convention on Sept. 21. 
 
12) Secession of three DPJ members to affect party's approach to 
Lower House election, Upper House management 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
August 29, 2008 
 
Three House of Councillors members of the Democratic Party of Japan 
(DPJ) have bolted to form a new party, throwing cold water on the 
President Ozawa and other party leaders. Now that it is certain for 
Ozawa to win a third term without a formal vote in the September 
presidential election, party leaders are gearing up for the next 
House of Representatives election. Although there will be no change 
in the current state of the reversal of strengths between the Lower 
and Upper House, the secession of three members is likely to cast a 
pall over the DPJ's approach to the management of the 
opposition-controlled Upper House. 
 
Deputy President Naoto Kan stressed in a press conference yesterday 
that Hideo Watanabe and Yasuhiro Oe, both of whom presented their 
resignation, were among those elected with a smaller number of votes 
in the proportional-representation constituencies. He criticized 
them: "Resignation as lawmakers should be the proper way for them to 
assume responsibility and fulfill their obligation as a 
politician." 
 
In part because they had repeatedly taken rebellious acts in voting, 
many party members say that they had already anticipated their 
departure.  Even so, there might be some effect on its approach to 
the management of the Diet in the Upper House. 
 
The DPJ caucus in the Upper House now holds 120 seats by joining 
hands with the People's New Party. If the party accepts the three's 
resignation, the number will drop to 117. In order for the DPJ to 
secure 121 seats needed for a majority, cooperation from the 
Japanese Communist Party (JCP) or the Social Democratic Party is 
indispensable. 
 
TOKYO 00002369  008 OF 010 
 
 
 
In the earlier ordinary Diet session, there were scenes in which the 
DPJ fell out of step not only with the JCP but even with the 
People's New Party. Unless the DPJ keeps close cooperation with 
other opposition parties, it will become difficult to have 
government-presented bills rejected or its bills adopted. 
 
 Hiroyuki Arai, who has joined the new party, belongs to the LDP 
caucus. If the new party cooperates with the ruling camp, 12 more 
seats will be needed for the ruling side to secure a majority. If 
six more members secede from the DPJ, the ruling camp will be able 
to regain a majority. 
 
As a senior Upper House member said, it is true that their secession 
gives a bad image for the DPJ, with an eye on the next Lower House 
election. Expressing his intention to run in the presidential race 
yesterday, Ozawa began to accelerate forming a policy manifesto for 
the Lower House election and preparing for announcement of 
party-endorsed candidates for the election. The secession drama at 
such a time might give the people the impression that the party 
lacks unity. 
 
13) New party to cooperate with ruling camp at extra Diet session 
 
SANKEI (Page 5) (Full) 
August 29, 2008 
 
A new party to be created by former postal minister Hideo Watanabe 
and four other lawmakers is expected to become in effect part of the 
ruling camp. The lawmakers plan to cooperate with the government and 
ruling parties during the extraordinary Diet session to be convened 
on Sept. 12. 
 
One of the members indicated that the new party would take a 
concerted action with the government and ruling coalition regarding 
the issue of extending the New Antiterrorism Special Measures Law, 
one of the agenda items at the upcoming extra Diet session. The 
lawmaker said, "I would like to take an appropriate stand." 
 
Another member also implied the cooperation with the government and 
ruling bloc, noting: "I think it would be good for the Democratic 
Party of Japan (DPJ) that a person like me, who has been a problem 
for it, should leave." 
 
Watanabe has often criticized Ozawa's management of the party, 
saying to his aides: "He links everything to politics. He has 
neither a guiding philosophy nor a policy." 
 
A DPJ official, however, made this comment: "The new party is made 
up of those who cannot read future politics." A conservative DPJ 
lawmaker reacted coolly, saying: "It is unbelievable that they will 
go over to the ruling camp, which is sinking ship, before the DPJ 
grabs the reins of power in the next House of Representatives 
election." 
 
14) Government to set today 10 trillion yen economic stimulus 
package: Coordination still under way on inclusion of fixed rate tax 
cuts; Some highway tolls to be halved 
 
NIKKEI (Top Play) (Excerpts) 
August 29, 2008 
 
 
TOKYO 00002369  009 OF 010 
 
 
The government and the ruling parties on August 28 firmed up the 
outline of a comprehensive economic stimulus package designed to 
address the steep rise in crude oil and food prices. A decision on 
how to handle fixed-rate tax cuts for reducing a designated amount 
from the income tax will be postponed. A formal announcement on the 
package will be made after details are boiled down on the morning of 
the 29th. The size of the aid package excluding items under 
coordination will reach about 1 trillion yen. The amount of real 
spending, which necessitates fiscal disbursements, will likely 
exceed 1 trillion yen. The package will also list a measure to cut 
portions of expressway tolls by 50 PERCENT possibly in October. 
 
Key points of economic stimulus package 
 
Items that have already been adopted 
? Lower expressway tolls 
? Financial support for trucking, domestic shipping and construction 
industries 
? Introduce new credit guarantee system for small- and medium-size 
businesses 
? Improve measures for smoother management of the medical service 
system for the elderly. 
? Extend and improve housing loan cuts 
? Speed up the introduction of energy-conserving facilities and 
facilities using new energy 
? Build authorized day nurseries and kindergartens urgently. 
? Expand loans to low-income earners and single-mother families 
 
Items under coordination 
? Fixed-rate tax cuts for low-income earners 
? Consumer price adjustment to be applied to pensions 
? Revise the reduced pension payout system for working elderly 
people. 
 
15) Government plans 1.7 trillion yen supplementary budget: No 
issuance of deficit-covering government bonds 
 
SANKEI (Top Play) (Full) 
August 29, 2008 
 
The government on August 28 decided to compile a supplementary 
budget for fiscal 2008 totaling approximately 1.7 trillion yen and 
to submit it to the extraordinary Diet session to be convened on 
September 12. It has also decided not to issue deficit-covering 
government bonds to fund the budget. It intends to finance the 
second budget with unobligated reserve funds with variable interest 
rates in the fiscal loan fund's special account, which is used for 
redeeming government bonds. The decision is in line with the wishes 
of Prime Minister Yasuo Fukuda, who is opposed to the issuance of 
deficit bonds. 
 
The prime minister on the 22nd indicated a negative stance to the 
issuance of deficit-covering government bonds to finance a 
supplementary budget, saying, "Future generations will have to repay 
that. I would like to avoid issuing such bonds, if possible." Former 
Liberal Democratic Party (LDP) Secretary General Hidenao Nakagawa on 
the 24th echoed this view, saying, "The size of a supplementary 
budget must be such that will not necessitate the issuance of 
deficit bonds." 
 
However, LDP Election Committee Chairman Makoto Koga on the 23rd 
insisted that a large scale second budget should be compiled, even 
 
TOKYO 00002369  010 OF 010 
 
 
if it meant delaying the government goal of moving the primary 
balance into the black by fiscal 2011. He said, "The primary balance 
is important. However, we should be prepared to make a major 
decision regarding a fiscal issue." Concerning the size of the 
proposed second budget, he said, "We can use our resourcefulness, if 
the size is up to 2 to 3 trillion yen." The New Komeito also takes 
the position that reasonable fiscal resources must be secured for 
emergency measures to defend the daily life of the public against 
soaring prices, such as the price of crude oil, as President Akihiro 
Ota put it. 
 
The government has eventually decided to finance the second budget 
with funds drawing from a so-called hidden slush fund in the special 
account - a reserve fund with variable interest rates. One 
government source said that funding a supplementary budget with such 
a fund would require an amendment to related laws. 
 
For this reason, if all opposition parties in the Upper House oppose 
the idea of issuing a supplementary budget, it would be difficult 
for a supplementary budget bill to secure Upper House approval. In 
that case, the government might have to resort to a revote on the 
bill in the Lower House. 
 
Some ruling party members are opposing the proposed size of the 
second budget with one official who once served as cabinet minister 
saying, "This would never satisfy the public." This is because they 
had been calling for a large scale with the issuance of 
deficit-covering government bonds in mind. The Fukuda cabinet will 
likely find it difficult to run the government. 
 
ZUMWALT