How did the Asō government resolve this tension? It punted, withdrawing the clause limiting social security spending to 220 billion yen but insisting that the government still views solving the fiscal crisis as a top medium- and long-term priority for the Japanese state. The new plan, for example, retains a provision that calls for annual three per cent cuts in public works spending. The government will also continue to economize in other areas (which will undoubtedly undermine the effort by LDP conservatives to ratchet up Japan’s defense spending).
This single episode says much about the decay of LDP rule.
Press coverage of the Asō government’s decision has focused on the role played by members of the LDP’s education, and health and welfare policy tribes (zoku) in pressuring the government to abandon the social security ceiling and other spending limits. ‘A free for all for zoku,’ an anonymous source told Sankei. Mainichi noted the role played by the zoku and added that Prime Minister Asō was missing in action in this debate. Naturally both of these factors are important in explaining why the Asō government softened its approach to the fiscal restraint. But it is useful to step back from the interplay of personalities: this episode shows the irreconcilable forces tugging at Asō and the LDP more generally. Asō, like Fukuda before him, is struggling to weave his way between economic reformists and traditionalists, between fiscal hawks and spendthrifts, between budget cutters and tax hikers. While at various points Asō has attempted to distance himself from Koizumi and ‘neo-liberal’ reformism, he has stopped short of committing to an approach that is anything more than a balancing act between the competing pressures present within the LDP. The LDP cannot make up its mind what kind of party it wants to be — and unfortunately for Japan, that schizophrenic party has an outsized role in shaping government policy.
Notice that this failure of vision on the part of the LDP has nothing to do with the bureaucracy, the favorite scapegoat of the structural reformers. If the LDP had a vision for governing — or if ruling politicians could impose a vision on the LDP — the bureaucracy would not have nearly as many opportunities for mischief and malfeasance.
In other words, just as the DPJ intensifies its plans for a possible power transition, the LDP has provided an excellent demonstration of how not to govern.