LDP council approves financial reform bills

The Liberal Democratic Party's Executive Council on Friday approved several economic bills, including one for revising the fiscal austerity law, that will be submitted to the Diet on Monday.

The LDP's non-Cabinet allies -- the Social Democratic Party and New Party Sakigake -- also gave their consent.

The Fiscal Structural Reform Law, enacted in November, is aimed at reducing the nation's huge fiscal deficits by setting numerical targets. The revisions include suspending in fiscal 1999 the imposition of a cap on social welfare spending that limits annual budget growth in that area to no more than 2 percent for fiscal 1999 and 2000.

Under the revision, the target year for stopping issuance of new deficit-covering bonds and reducing the fiscal deficit to no more than 3 percent of gross domestic product would also be postponed from fiscal 2003 to fiscal 2005.

At the LDP meeting, several members voiced strong opposition to the revisions. Former Chief Cabinet Secretary Seiroku Kajiyama said that making exceptions would go against the government's fiscal reconsolidation policy. Former Construction Minister Shizuka Kamei called for the elimination of all spending caps as emergency measures to boost the stagnant economy.

But Executive Council Chairman Yoshiro Mori concluded deliberations, saying that the bills need to clear the Diet as soon as possible to implement the government's economic stimulus package, compiled last month.