Prime Minister Taro Aso finally made it clear that he will not submit a second supplementary budget for fiscal 2008, which is necessary to implement the ¥26.9 trillion economic stimulus package, to the current extraordinary Diet session. Instead, he will submit it to an ordinary Diet session to be convened in early January. Nevertheless, the current Diet session will be extended to ensure enactment of a bill to continue the Maritime Self-Defense Force's refueling mission in the Indian Ocean and a bill to inject capital into financial institutions.

Mr. Aso has been saying that priority should be given to policy measures to cope with Japan's severe economic conditions. His decision will not win over the public. He used to say that small and medium-size companies may face a difficult time toward the end of the year, leading to bankruptcies and dismissal of workers. But it seems that he does not care much about their plight. The economic stimulus package features ¥30.8 trillion in credit guarantees for small and medium-size companies.

Mr. Aso was reportedly inclined to submit the supplementary budget to the current Diet session, but his aides dissuaded him. They fear that even if the supplementary budget is submitted, deliberations on it will be delayed due to resistance from the opposition force, affecting the work for the fiscal 2009 budget. The opposition force is critical of the ¥2 trillion in cash benefits included in the economic stimulus package, viewing it as a publicity stunt during the runup to the coming general elections. Mr. Aso's failure to submit the supplementary budget to the current Diet session shows that his grip on power inside the government and the ruling bloc has weakened.