SENIOR RULING PARTY LEADERS ON DOMESTIC POLITICAL

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 001006

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/11/2018
TAGS: PGOV PREL PINR JA
SUBJECT: SENIOR RULING PARTY LEADERS ON DOMESTIC POLITICAL
SITUATION

TOKYO 00001006 001.2 OF 003


Classified By: CDA W. Michael Meserve, reasons 1.4 (b),(d).

Summary
--------------


1. (C) EMBASSY Tokyo Political Officers called recently on
senior ruling LDP politicians Makoto Koga, Kaoru Yosano, and
Hidenao Nakagawa in separate meetings to discuss the ongoing
impasse in the Diet and possible near-term political
scenarios. Although the three offered differing opinions on
dealing with the divided Diet, the meaning of Prime Minister
Fukuda's sliding poll numbers, and how the LDP will resolve
road-related revenue and gasoline tax issues, there was
agreement that public opinion does not favor the ruling party
and thus holding an election soon would be a mistake. End
Summary.

Dealing with a Divided Diet
--------------


2. (C) Former Chief Cabinet Secretary Kaoru Yosano said the
easiest way to fix the current divided Diet is for the
opposition Democratic Party of Japan (DPJ) to win a majority
in the next Lower House election. However, according to many
election analysts with whom Yosano has met, the DPJ will not
be able to pull this off. This leaves four other possible
scenarios: 1) formation of a grand coalition; 2) formation of
a partial coalition; 3) establishment of a policy
consultation body; and 4) establishment of a new party by
like-minded elements of the LDP and the DPJ. Option 4 will
likely result in a broad political realignment, Yosano
predicted. In a realignment scenario, he believes that the
party's "ultra-nationalists" would likely break away, as
would the anti-Ozawa group within the DPJ. He was unsure,
however, what kind of common political goals these two groups
could use to form a party.


3. (C) Yosano expressed his personal belief that realignment
is more likely than not. Two other senior LDP politicians
with whom he had spoken -- former Upper House caucus leader
Mikio Aoki and senior Lower House member Taku Yamasaki --
also believe political realignment will occur naturally after
the next Lower House election, because an increasing number
of LDP politicians believe realignment is the only option to
solve the current Diet stand-off between the ruling and
opposition parties.


4. (C) LDP Election Committee Chairman Makoto Koga, on the
other hand, said establishing a policy consultative body is
the best way to deal with the divided Diet. According to
Koga, the ruling coalition and the opposition had both
pursued this idea, but their timing was off. Because
opinions will often be split between the Lower and Upper
Houses, some kind of consultative body in each house should
set rules on how to deal with such "divided situations."


5. (C) On the possibility of a grand coalition, Yosano
expressed skepticism because it is already "an old card"
following the failure of Prime Minister Fukuda and opposition
DPJ leader Ichiro Ozawa to reach an agreement in late 2007.
Before forming a grand coalition, a policy consultation
mechanism needs to be in place, Yosano stressed, faulting
Ozawa and Fukuda for poor preparations. Fukuda and Ozawa
should have had their subordinates work out the coalition's
details before meeting to come to an agreement, Yosano
observed. In contrast, Koga stated that only with a grand
coalition could Japan address the problems it is now facing,
such as missing pension records. Koga stated that the LDP is
prepared to make such a bold move, but Ozawa may not be able
to unite his party behind this.

Election Timing
--------------


6. (C) Both Koga and former LDP Secretary General Hidenao
Nakagawa denied the possibility of a snap election, given the
current political situation. Nakagawa commented that if the
LDP were to attempt an election now, it would be in "very big
trouble." For his part, Koga feels, at this time, the LDP
does not have the energy to fight an election, public opinion

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is not in favor of the LDP, and the economic situation is not
good. In addition, public distrust in politics is growing
due to "ongoing political confusion." Koga explained that
the unprecedented patterns in the opinion polls -- the
continuing drop of the Fukuda Cabinet support rate, while
support rates for the LDP and the DPJ remain mostly unchanged
-- prove that the public has no interest in politics.
(Usually, the Cabinet and LDP support rates move together and
the DPJ support rate moves inversely to the others.) Also,
since the LDP support rate remains almost the same despite
the drop in the Cabinet support rate, there has been little
criticism of the Prime Minister from within the LDP, Koga
noted.


7. (C) In contrast to Koga, Yosano suggested the possibility
of Prime Minister Fukuda stepping down. If the Cabinet
support rate were to drop below 25%, Yosano predicted, the
mood in the LDP could change rapidly, and LDP members would
begin to realize that the party would not be able to go
through a Lower House election and maintain a majority under
Fukuda. Fukuda would thus become even weaker and unable to
remain as Prime Minister.

Road Revenue and Gas Tax
--------------


8. (C) Koga, one of the leaders of the LDP's highway
construction lobby, did not express opposition to the idea of
incorporating road-related tax revenue into general revenue
from 2009 (rather than continuing to earmark such revenue for
road spending). On the prospect of opposition coming from
within the party's vested road interests, Koga responded "I
am the biggest opponent of the idea, but am keeping quiet, so
it will go okay." (Note: Indeed, the LDP agreed April 11 to
incorporate road-related revenue into general revenue from
2009, but Koga and other highway construction lobby members
were sure to include the caveat that "necessary road funding
will be undertaken." End Note.)


9. (C) If the ruling coalition were to use its two-thirds
majority in the Lower House to reimpose the provisional
gasoline tax at the end of April, Nakagawa Hidenao was not
sure what would happen. Symptomatic of the lack of any
communication between the LDP and DPJ, there are no
discussions taking place across the aisle on the subject, he
complained. The LDP seems to be caught in the DPJ's internal
battle between Ozawa and anti-Ozawa members, Nakagawa
observed. He could not say for sure whether any ruling party
members would vote against raising the gasoline tax to
protest discontinuing road revenue earmarks, noting that once
the Prime Minister made up his mind, members would have to
follow his decision. Nakagawa criticized the DPJ for not
offering any concrete proposals on tax rates and not being
serious enough to pursue making changes from this year.

Kantei and the PM's State of Mind
--------------


10. (C) Koga, asked about the current state of the Prime
Minister's Office (the "Kantei"),expressed concern that the
party is unfairly making Fukuda take charge of the details of
Diet management. Chief Cabinet Secretary Nobutaka Machimura
and LDP Secretary General Bunmei Ibuki, together with Diet
Affairs Committee Chairman Tadamori Oshima, should instead be
the ones handling this. The PM should not have to decide the
Diet's schedule or whether to re-vote on the gasoline tax.
Considering the chilly relationship between Machimura and
Ibuki, however, Koga said it was difficult to achieve this
coordination and he is at a loss as to what to do.


11. (C) Personally, Koga commented that PM Fukuda is a calm
person and is being patient with the current situation.
Nakagawa also said that Fukuda is just trying to do his best,
although feeling stressed under the current circumstances.
Koga noted that he had heard that Ozawa had decided to say
"no" to whatever the Prime Minister proposed, and it was
difficult for Fukuda even to get Ozawa on the phone. Koga
believed that Ozawa is attempting to use this negative
attitude to build support within the DPJ for his campaign to
win a second term as party chief in the September DPJ

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leadership election.
MESERVE