C O N F I D E N T I A L TOKYO 002281

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/25/2016
TAGS: PGOV PREL ECON JA
SUBJECT: JAPAN'S DIET AGENDA: FATE OF POLITICALLY SENSITIVE
BILLS MURKY

Classified By: Charge d'Affaires a.i. Joe Donovan. Reasons 1.4 (b/d).


1. (SBU) Summary. Three months into the 164th Diet session,
Japanese lawmakers are finally turning back to policy after
being distracted by scandals for many weeks. Several big
bills with broad consensus support are still on track. A
planned supplemental budget and the FY06 budget passed the
Diet on schedule, and Prime Minister Koizumi's highly touted
administrative reform bill is awaiting Upper House
deliberation after Lower House approval on April 20.
However, the fate of other more controversial bills,
including one to raise the Japan Defense Agency to a
ministry, an amendment to the Basic Education Law and one to
formalize national referendums, remains unclear. End Summary.

Normalcy After Scandals
--------------


2. (SBU) The Diet session that opened on January 20 did not
start out the way the ruling coalition had hoped. Koizumi
and others in his leadership circle came under attack by both
the opposition and the media for the discovery of banned
material in a shipment of U.S. beef, the relationship in last
year's election between the LDP and arrested businessman
Takafumi Horie, former President of Livedoor, the bid rigging
scandal at the Defense Facilities Administration Agency
(DFAA), and the asbestos and earthquake building data
falsification issues. A barrage of opposition-led criticism
kept the Koizumi administration on the defensive until
mid-February, when another scandal, the Nagata e-mail
debacle, emerged.


3. (SBU) On February 16, opposition Democratic Party of
Japan (DPJ) member Nagata produced an e-mail that purported
to prove the jailed Horie had paid off Liberal Democratic
Party (LDP) Secretary General Takebe's son. Unable to
provide proof of the e-mail's authenticity, and faced with
mounting evidence it was a fake, the DPJ found itself on the
receiving end of media, public and ruling coalition
criticism. The e-mail scandal dragged on through March and

into April when Nagata was foced to leave the Diet in
disgrace and DPJ President Maehara resigned to take
responsibility. With the April 7 election of new DPJ head
Ozawa, attention has returned to deliberating the Prime
Minister's reform legislation.

Extension Necessary?
--------------


4. (SBU) There is widespread agreement that, without a
lengthy extension, many bills slated for this session will be
held over. The big bills with broad support among Diet
members, such as the supplemental budget and the FY06 budget,
passed on schedule and Koizumi's administrative reform
package, which cleared the Lower House on April 20, appears
to be on track to be enacted. However, Diet members and
staffers with whom Embassy Tokyo Political Officers spoke are
less sure of the fate of other politically sensitive
legislation. Whether or not enough time is left in the
session is a main calculation. Should the 150-day Diet
session end, as scheduled, on June 18, bills like the Basic
Education Law, the national referendum and the elevation of
the Japan Defense Agency to a ministry will likely be
shelved, most observers agree.


5. (C) LDP Lower House members Takeo Ochi, Jun Hayashi and
Masaaki Taira agreed that, without an extension, there is not
enough time remaining in the Diet session to get through all
of the remaining bills. LDP Diet Affairs Chairman Hiroyuki
Hosoda thinks a 3-month extension is needed to deliberate on
the bills, Ochi said. LDP International Bureau Chief Miyako
Ito, a veteran at LDP Headquarters, seconded their concern.
They estimate that over 80 bills are still pending. The
media expects the DPJ's win in the April 23 Chiba by-election
to reinvigorate the opposition, and Taira expressed concern
that opposition obstinacy would serve to further slow the
pace of business.

Up Next
--------------


6. (C) The coalition continues to pursue the administrative
reform bill package. Because the DPJ currently supports four
of the five administrative reform bills, Ito thought they
would pass the Upper House without much difficulty. Next,
the coalition will turn to bills on health care reform,
including some unexpected additions to the docket. In
response to a DPJ plan to introduce a bill providing cancer
care, Komeito -- which fashions itself as a supporter of the
public's welfare -- is insisting that the coalition submit
its own bill that would focus on improving the medical system
and providing care for cancer patients. In a coalition
meeting on April 19, Komeito promised to go along with the
bills the LDP wishes to pass, if the Komeito's cancer bill is
passed this session too, Ito shared.


7. (C) After the new cancer care bill passes, other health
care legislation, such as a bill on organ transplants and one
that would increase the co-payments of wealthy elderly
patients, will likely be considered. LDP Upper House member
Keizo Takemi, a member of the health care "zoku", told us in
late-April that he was certain the DPJ would confront the LDP
on health care reform, especially since the current bill
sought to cut reimbursements for medical institutions and to
increase patient co-payments. Takemi personally felt that an
increase in payments was inevitable, but stressed that the
revision should not limit patients' access to quality
healthcare.


8. (C) Regarding the national referendum bill, the coalition
and the DPJ agreed that the voting age be set at 20, but also
agreed to continue discussion on the possibility of lowering
it to 18. The current voting age for "regular" elections is
20, but Komeito and the DPJ had earlier both pushed to lower
the voting age for the referendum to 18. The LDP opposed the
idea, insisting that the voting ages for the referendum and
regular national elections should be consistent. Hayashi, a
member of the Special Committee for Research of the
Constitution, thought that more discussion between the
coalition and opposition was needed on the issue, but said
the decision is being left up to senior committee leaders.
Separately, Komeito has agreed to submit a bill to elevate
the JDA to a ministry, and Ito expected it to be submitted at
the end of the session and carried over to the extraordinary
session this fall. The Basic Education Law still faces
opposition within the LDP and from Komeito. Ito thought it
would also be carried over to the next session.

Koizumi's Calculations
--------------


9. (C) Our contacts take at face value Prime Minister
Koizumi's publicly expressed wish to avoid extending the
session, and expect the legislative pace to quicken in
response. Ito surmised that this could be a strategic move
on Koizumi's part to pressure his colleagues to try to pass
as many bills as possible by June 18. Still, she did not
think he would extend the session; if he does, it would be
only for about a week, she said. Koizumi is anxious to
conclude the Diet session on schedule so that he can visit
the United States in late June; leaving the country near the
end of an ongoing Diet session would be difficult, Ito
observed.


10. (C) When making his decision on the Diet extension,
Koizumi will have three things in mind: 1) how to avoid
becoming a lameduck, 2) how to get his preferred candidate
elected in September's LDP presidential election and 3) how
to retain his influence after stepping down. If Koizumi
agrees to a lengthy extension, he may not have enough time to
position his favorite candidate, Ito concluded. (Note: Ito
hinted that Koizumi favored Chief Cabinet Secretary Abe.) In
addition, an old rumor still floating around Nagatacho is
that Koizumi is considering a surprise, third visit to North
Korea. This would, in theory, help him retain his leadership
and influence, Ito said. By ending the session on schedule,
he could make time to arrange the trip, support his favorite
candidate and position his successor to continue his policy
line.
DONOVAN