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Cablegate: Japanese Morning Press Highlights 05/20/08

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UNCLAS SECTION 01 OF 12 TOKYO 001367

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DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 05/20/08

Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

Opinion polls:
4) Fukuda Cabinet support rate sinks to 19 % in Asahi poll, with
non-support rate rising 6 points to 65 % (Asahi)
5) Yomiuri poll: Cabinet support rate drops 3.9 points to 26 % ,
while non-support rate reaches 64.7 % (Nikkei)
6) Government clueless as to how to reverse trend of sliding cabinet
support ratings in the polls as opposition camp strengthens
criticism (Yomiuri)

China earthquake:
7) Japan's rescue team could return today (Mainichi)
8) Government considering the dispatch of a reconstruction team to
quake-stricken area in China (Mainichi)
9) Japanese rescue team, arriving too late and faced with impossible
conditions, unable to show its know-how (Asahi)

10) South Korea's foreign minister protests to Japan about plan to
teach school children that Takeshima is Japanese territory (Nikkei)


11) Joint ruling-camp project team considering permanent law for SDF
overseas dispatch (Mainichi)

12) METI white paper stresses linkage between the environment and
the economy (Asahi)

13) Japan, Indonesia to ink memorandum accepting nurses and
caregivers into Japan (Asahi)

14) Japan plans to ship to Philippines 200,000 tons of
minimum-access rice to the Philippines (Asahi)

15) Open hearing in Tokyo: US will not restrain shipments of the
meat of offspring of cloned animals (Mainichi)

Political agenda:
16) Prime Minister Fukuda plans to give priority treatment to
elderly in new policy measures (Asahi)
17) Democratic Party of Japan to submit to Upper House this week a
bill scrapping the controversial medical system for the elderly that
taps their pensions (Yomiuri)
18) Ruling parties deem 10 bills languishing in the Diet as
impossible to be passed (Asahi)
19) Machimura faction of the LDP holds fund-raising party but
faction's post-Fukuda election candidate remains elusive (Mainichi)


Articles:

1) TOP HEADLINES

Asahi:
Social Security National Council estimates consumption tax rate to
be raised to between 9.5 % and 18 % , if basic pension is to be
fully funded by tax


TOKYO 00001367 002 OF 012


Mainichi:
Tax-funded pension system to boost additional public burden up to 24
trillion yen: Government estimates consumption tax rate to be raised
to 14.5 % in next fiscal year

Yomiuri: Sankei: Tokyo Shimbun:
Sichuan quake: 200 victims missing after mudslides; 150 road
restorative construction workers injured; Death toll could reach
70,000

Nikkei:
Toshiba acquires nuclear generation fuel company: Integrated
production from uranium to equipment

Akahata:
Report from Sichuan quake site: Lamentation and tears

2) EDITORIALS

Asahi:
(1) Pension reform estimate: We want to see whole picture of welfare
policy
(2) Introduction of imprisonment for life: Make most of
suprapartisan proposal

Mainichi:
(1) Hansen's disease: Protect every patient
(2) Sichuan quake: Relief also needed for cyclone victims in Burma

Yomiuri:
(1) Sluggish public support ratings for Fukuda cabinet: Government
should come up with clear vision regarding what it is going to do
(2) Pension reform process has reached stage for detailed
discussion

Nikkei:
(1) What is next challenge to Narita Airport, which marked 30th
anniversary of opening
(2) Is it necessary to pay compensation for dubbing music,
broadcasts ten times?

Sankei:
(1) Sichuan quake: Rush to prevent collateral disasters
(2) Narita Airport marks 30th anniversary of opening: Time to review
current practice of Narita Airport for international flights and
Haneda Airport for domestic flights

Tokyo Shimbun:
(1) Tax-funded pension system: Impending issues should be discussed
first
(2) Cluster bomb: Time to decide to impose blanket ban

Akahata:
(1) Okinawa Prefectural Assembly election

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, May 19

NIKKEI (Page 2) (Full)
May 20, 2008


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09:17
Met at the Kantei with Lower House members Taro Nakayama, Takashi
Mitsubayashi, and Koichiro Shimizu.

09:56
Met State Minister for Science and Technology Policy Kishida,
Cabinet Office Vice Minister Uchida, and Council for Science and
Technology Policy members Masuo Aizawa and Taizo Yakushiji, and
others.

10:10
Met Japan Federation of Bar Associations Chairman Makoto Miyazaki
and family members of victims in incidents caused by gas water
heaters, with Kishida present. Followed by Special Advisor Ito.

11:14
Met Transport Minister Fuyushiba and Transport Ministry Civil
Aviation Bureau Director General Suzuki, with Deputy Chief Cabinet
Secretary Saka present.

12:58
Met Chief Cabinet Secretary Machimura.

15:10
Met METI Trade and Economic Cooperation Bureau Director General
Adachi, with Assistant Deputy Chief Cabinet Secretary Ando. Followed
by Health, Labor and Welfare Ministry Vice Minister Edogawa and
Insurance Bureau Director General Mizuta.

16:23
Met State Minister for Economic and Fiscal Policy Ota.

17:01
Attended an executive meeting in the Diet Building.

17:46
Attended a meeting of the Council for Science and Technology Policy
at the Kantei.

19:40
Returned to his official residence.

4) Poll: Cabinet support at 19 %

ASAHI (Page 1) (Abridged)
May 20, 2008

The Asahi Shimbun conducted a telephone-based public opinion survey
across the nation on May 17-18, in which the rate of public support
for Prime Minister Fukuda's cabinet was 19 % , dropping from the 20
% rating in the last survey taken between April 30 and May 1. The
nonsupport rate for the Fukuda cabinet was 65 % (59 % in the last
survey), the highest ever for the Fukuda cabinet since its
inauguration. The government plans to incorporate road-related tax
revenues into the state's general account budget to use the road
taxes for other purposes. Asked if Fukuda will be able to do so, 82
% were negative, saying he cannot substantially change the way the
road taxes are used. As seen from the figure, the greater part of
the public wonder whether he can deliver.

The ruling Liberal Democratic Party and its coalition partner, New
Komeito, plan to take a second vote in the House of Representatives

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on a bill using gasoline taxes for road construction and other
road-related infrastructure projects. Prior to that, the government
made a cabinet decision to incorporate the gasoline taxes into the
state's general account budget. Asked about this decision, public
opinion was split, with 41 % approving of it and 46 % negative.
Meanwhile, only 31 % were affirmative of the leading opposition
Democratic Party of Japan (Minshuto) over what to do about the
gasoline taxes and road-related tax revenues. The DPJ also cannot be
said to have scored points over this issue.

The government has now introduced a new healthcare insurance system
for the elderly, under which almost all of those aged 75 and
over-including dependents who currently do not have to pay insurance
premiums-will have to pay premiums in October and afterward. Asked
about this system, 75 % were negative, with 17 % affirmative.

5) Poll: Fukuda cabinet's support rate at 26 % , lowest ever since
inauguration

YOMIURI (Page 1) (Abridged)
May 20, 2008

According to a face-to-face nationwide public opinion survey
conducted May 17-18 by the Yomiuri Shimbun, the approval rating for
Prime Minister Fukuda and his cabinet was 26.1 % , dropping 3.9 %age
points from the preceding month and reaching a new low. The
disapproval rating for the Fukuda cabinet was 64.7 % , up 6.3 points
from the preceding month.

Even among those who support New Komeito, the ruling Liberal
Democratic Party's coalition partner, the Fukuda cabinet's
nonsupport rate was a little over 50 % , with its support rate at a
little less than 40 % . Among those with no particular party
affiliation, the Fukuda cabinet's nonsupport rate reached 76.1 % .

The most common reason given for not supporting the Fukuda cabinet
was "I cannot appreciate its political stance" at 47 % , followed by
"nothing cannot be expected of its economic policy" at 45 % .

What lies behind the fall of the Fukuda cabinet's support rate is
apparently the public's strong dissatisfaction with the
reinstatement of gasoline surcharges and the introduction of a new
healthcare premium deduction system for the elderly.

Asked if it was good that the gasoline surcharges have now been
restored, 66 % answered "no," with only 25 % saying "yes." Asked
about the newly introduced healthcare system, 30 % were affirmative
of it, with 69 % negative. Moreover, 94 % said the government
failed to fully prepare or account for the system for its
introduction.

In the breakdown of public support for political parties, the LDP
stood at 28.5 % , down 2.1 points from the preceding month. The
leading opposition Democratic Party of Japan (Minshuto) was at 18.4
% , up 1.0 point.

6) 26 % rating for Fukuda cabinet: No clue for gov't to rebound

YOMIURI (Page 4) (Abridged)
May 20, 2008

The Yomiuri Shimbun's public opinion survey in May clearly showed a

TOKYO 00001367 005 OF 012


downward trend of the Fukuda cabinet's approval rating. The
government and ruling parties remain unable to get a clue to rebound
in public support, finding no way out. The opposition camp is
further intensifying its criticism of the ruling coalition.

Prime Minister Fukuda was asked by reporters yesterday evening about
the results of public opinion surveys, including the Yomiuri
Shimbun's survey. "That's all right," Fukuda said. "That can't be
helped," he added.

The drop in the Fukuda cabinet's support rate can be taken as
reflecting a public backlash against the restoration of gasoline
surcharges and also reflecting public criticism over the
introduction of a new health insurance premium deduction system for
the elderly.

Even so, none of the ruling Liberal Democratic Party's lawmakers is
trying to dump Fukuda. A former cabinet minister said: "The House of
Councillors is now under the opposition parties' control, so there's
no progress in Diet deliberations. There are also a number of
issues, such as healthcare insurance. Whoever may become prime
minister, now is a difficult time."

Meanwhile, Democratic Party of Japan (Minshuto) Secretary General
Hatoyama noted yesterday: "The cabinet's support rate is lower than
the LDP's support rate. This means that even the LDP supporters
think the Fukuda government is no good. The Fukuda cabinet should at
least resign en masse. Otherwise, the prime minister should dissolve
the Diet." However, the DPJ is also dull in public support. One of
its junior lawmakers said, "I think people do not accept our
President Ozawa's stance of raising an objection to anything."

7) Rescue team to return home today

MAINICHI (Page 1) (Full)
May 20, 2008

Beichuan, Sichuan Province

The 61-member international emergency rescue team led by Takashi
Koizumi, which was sent from Japan to Sichuan Province in China in
the wake of the deadly earthquake there, decided yesterday to wrap
up its activities in Beichuan County. The team will return to
Chengdu, hold talks with the Chinese side, and head back for Japan
as early as today. Meanwhile, the government decided yesterday to
send a medical team composed of some 20 physicians, nurses and
pharmacists in compliance with China's request.

The rescue team decided to pull out of Beichuan County because there
is a high likelihood of secondary disaster and also because chances
are slim to find survivors one week after the occurrence of the
earthquake.

The first group of the rescue team arrived at Beijing on May 15 as
the first human assistance from a foreign country. On May 16, the
team searched for survivors in Qingchuan County in Sichuan Province.
Merging with the second group on May 18, the team has been
conducting activities in Beichuan County. The team has found 16
bodies.

The medical team will depart for China as early as today. The area
of activities will be determined through talks with China.

TOKYO 00001367 006 OF 012

8) Government considering sending reconstruction team; Rescue team
demonstrates Japan's presence

MAINICHI (Page 3) (Full)
May 20, 2008

The government has given a positive assessment to activities by the
Japanese international emergency rescue team sent to Sichuan in the
aftermath of the devastating earthquake, with a senior Foreign
Ministry official saying, "They have displayed Japan's presence and
had a positive effect on Japan-China relations." In compliance with
China's request, the government will also consider sending an
experts' team composed of engineers and others to engage in
reconstruction assistance following a medical team that will leave
Japan as early as today.

Chinese Ambassador to Japan Cui Tiankai, who delivered a speech in
Tokyo on May 16, also expressed his hope, saying: "Japan has
disaster prevention technology that is higher than that of China,
and it can cooperate in reconstructing disaster-stricken areas." The
government thinks the country was able to impress not only China but
also other Asian countries with its ability to with disasters as an
anti-disaster advanced country.

At the same time, there is discontent about the fact that the rescue
team arrived at the disaster-stricken area five days after the
deadly earthquake hit China due to Beijing's slow announcement to
accept Japanese rescue workers. Chief Cabinet Secretary Nobutaka
Machimura said, "Due to a delay in departure for China, the rescue
team was not able to conduct activities as expected."

9) Sichuan earthquake: Japanese rescue team regrettably "pulls out"
from rescue activities without displaying its capabilities

ASAHI (Page 30) (Excerpts)
May 20, 2008

Tetsu Kobayashi, Beichuan (Sichuan Province, China), Takaaki Ikeda,
Atsushi Akutsu

The Japanese international disaster relief team, which had been
engaged in rescue activities in Sichuan Province, China, where a
powerful earthquake occurred, yesterday put an end to its rescue
efforts in the Beichuan Qiang Autonomous County and withdrew to
Chengdu. The team in effect pulled out from the rescue activities
without rescuing any single victim, after being plagued by
communication and other troubles even before starting the searching
and rescuing of victims. The Chinese side expressed thanks to the
team, but members of the team appeared in frustration for their
inability to rescue victims as they initially expected.

Late yesterday, the Japanese rescuers returned to a hotel in
Chengdu, applauded by dozens of hotel workers and citizens. Some
hotel workers and citizens surrounded Japanese relief team members
after they got out of the bus and took their photos with their
mobile-phones that have cameras. The rescuers looked rock-faced and
getting out of the bus, they hurriedly entered the hotel, holding
their heads down.

Japanese rescue team held up over traffic accident and faced
confusion over information

TOKYO 00001367 007 OF 012

The first group of the Japanese rescue team arrived at Chengdu via
Beijing before dawn of May 16. The group was aboard a large bus and
headed for Guanzhuang, Qingchuan County, some 400 kilometers away
from Chengdu. But the group later was held up for nearly one hour
over a rear-end collision of a truck running ahead of the group's
bus. It was around 9:00 a.m. on the following day, when the group
arrived at its destination.

However, due to insufficient communications with local authorities,
the group was brought by a senior local government official to a
village of some 120 households which were involved in a massive
landslide with some two kilometers in width. This situation was
beyond what the Japanese rescue team, which is an expert for urban
disasters and has rescued victims who were buried under houses, had
previously assumed.

The senior local government official told the Japanese rescue team,
"I hope you will save this situation with your technology." But the
Japanese side simply said: "This is not what we can handle."

As the next location for rescue activities, Qiaozhuang, Qingchuan
County, was chosen, and the Japanese team was told that it would
take 40 minutes to arrive there. But the team was involved in a
traffic jam of military vehicles on the way to the location in a
narrow mountain path where two vehicles narrowly passed each other.
It was 3:30 p.m. four hours after their departure. What's worse,
what they saw there was arubble of bricks that had broken into tiny
pieces. It was difficult for them to rescue victims under those
conditions.

Late on May 17, the team moved to the Beichuan Qiang Autonomous
Country. Search-and-rescue dogs suffered from diarrhea after a long
bus ride. According to the Chinese side, several days before a woman
shouted, "Help me." One of the team regrettably said, "Should we
have arrived here earlier, we could have saved her."

Chinese side appreciated the Japanese rescue team

In China, the Japanese rescue team was praised in a number of news
reports by Chinese media for their rescue efforts. The Chinese side
banned Japanese media company reporters from accompanying the
Japanese rescue team because dead bodies were not collected well in
the central area of the Beichuan County. Instead, reporters and
cameramen from the Xinhua News Agency traveled with the Japanese
team and briskly reported on its rescue activities.

10) Sparks beginning to fly between Japan, South Korea over
Takeshima issue

NIKKEI (Page 2) Full)
May 20, 2008

A spat has begun between Japan and South Korea over territorial
claims to the Takeshima/Dokdo islets, triggered by the Education
Ministry's decision to specify the islets as Japan's territory in
the instruction manual of the new educational guidelines for junior
high school students. South Korean Foreign Affairs and Trade
Minister Yu Myung-hwan yesterday protested to Japanese Ambassador
Toshinori Shigeie. A dispute may be re-ignited.

Chief Cabinet Secretary Nobutaka Machimura said in a press

TOKYO 00001367 008 OF 012


conference the same day: "No decision has been made on what
description will be used about the territorial issue." The Education
Ministry will decide on the wording by July. Until then, the Foreign
Ministry intends to watch calmly how the situation will develop.

The Takeshima issue was not brought up in the two rounds of
Japan-South Korea summit held since President Lee Myung-bak came
into office in February. The two leaders reportedly intentionally
skirted the issue in order to underscore their willingness to
establish a future-oriented relationship. Vice Foreign Minister
Mitoji Yabunaka said: "Japan will respond to the situation in a
cool-headed manner," but the territorial issue may be politicized
depending on what expression will be used and how the South Korean
people will react.

11) Ruling parties to establish joint project team to consider
permanent SDF overseas dispatch law

MAINICHI (Page 5) (Full)
May 20, 2008

The Liberal Democratic Party and the New Komeito decided yesterday
to set up a joint project team on a permanent law specifying a set
of rules for the overseas dispatch of the Self-Defense Forces.
Former LDP Vice President Taku Yamasaki is expected to become the
team leader. Coordination is underway to hold the group's inaugural
meeting later this week.

The New Komeito had been cautious about establishing a permanent
law. Nevertheless, the opposition camp is certain to oppose
extending the Antiterrorism Special Measures Law, which is to expire
next January. Democratic Party of Japan lawmakers are in favor of a
permanent law. Given the situation, the two parties will study the
option of permanent legislation to explore the possibility of
reaching an agreement (with the opposition camp).

12) Trade White Paper calls for strengthened economic cooperation
through environment-protection measures

ASAHI (Page 7) (Full)
May 20, 2008

The Ministry of Economy, Trade, and Industry (METI) yesterday
outlined the 2008 White Paper on International Trade. The paper
advocates the initiative of "United Economies and Environment of
Asia" involving 16 countries that include Japan and the Association
of Southeast Asian Nations (ASEAN) countries. It calls for the
countries to pursue both economic growth and environmental
protection by taking such measures as spreading energy-conservation
technology across the region, based on an economic partnership
agreement (EPA) in the region.

The 16 countries are Japan, China, South Korea, and the 10 ASEAN
countries, which are the member countries of the East Asia Summit,
India, Australia, and New Zealand. The draft takes up problems
dogging the region, such as the increasing degree of dependence on
imported oil due to its economic growth, deteriorating air
pollution, the aging of working population, and over-concentration
in urban areas. The draft stresses the need for the countries to
jointly address these tasks, in order to grow achieve their economic
growth in a stable way.


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Specifically, the draft emphasizes the need for the 16 countries to
realize an "East Asia EPA" for trade liberalization, as well as
improving the environment to boost investment by stepping up efforts
to protect intellectual property rights and other measures. The
draft also calls on the countries to cooperate in storing oil by
saving oil consumption in the region with Japanese firms' technology
to save energy. Furthermore, the report suggests promoting the
division and specialization of production in the region, as well as
accelerating market integration by establishing international
distribution networks and developing necessary infrastructure for
online electronic commerce. The report specifies that the region
aims to make 60 % of the population middle-class people by 2030.
The ministry plans to submit the outlined draft to a meeting of the
Liberal Democratic Party's Economy and Industry Division today.

13) Japan, Indonesia sign notes on Japan's acceptance of nurses

ASAHI (Page 7) (Full)
May 20, 2008

Japan and Indonesia signed a memorandum of understanding in Jakarta
yesterday on Japan's acceptance of nurses and caregivers from
Indonesia. This is a main feature in the economic partnership
agreement (EPA) concluded by the two countries. In late July,
Indonesia is scheduled to send up to 500 such workers to Japan. They
will aim to pass a national examination while doing a subordinate
job at hospitals or nursing facilities in Japan.

In negotiations, Indonesia called for the minimum level of wage to
be guaranteed, but Japan declined it. Instead, Japan has promised to
convey to these facilities Indonesia's request that more than
200,000 yen be paid to a nurse and more than 175,000 yen be paid to
a caregiver per month.

14) Agriculture ministry looking into sending 200,000 tons of MA
rice worth 14 billion yen to Philippines

ASAHI (Page 7) (Full)
May 20, 2008

The government has revealed that it is looking into sending 200,000
tons of rice from stocks purchased in compliance with the minimum
access (MA) clause, adopted at the Uruguay Round in 1993, which
mandates Japan to import rice. The aid, if realized, would be the
largest scale ever since the shipment of 500,000 tons of domestic
rice in stocks to North Korea in fiscal 2000 as emergency rice aid
to any single country.

Vice Agriculture, Forestry and Fisheries (MAFF) Minister Toshiro
Shirasu revealed this during a regular press conference on May 19.
He said that MAFF Minister Wakabayashi on May 16 received through a
diplomatic channel a letter asking for 200,000 tons of rice aid from
Philippine Agriculture Secretary Yap. Shirasu said, "We want to
consider the request in a positive way, while undertaking
coordination with fiscal officials."

There was about 1.2-1.3 million tons of MA rice in stock as of March
this year. Whether the planned aid will be provided as grant aid or
loan aid, or whether the rice will be sold has yet to be decided.
One ton of MA rice imported in fiscal 2005 is about 700,000 yen on
average. Grant aid of 200,000 tons of rice translates into 14
billion yen to be shouldered by Japan. MAFF will undertake

TOKYO 00001367 010 OF 012


coordination regarding whether to allocate the funds from the
government's ODA budget or cover such with its special food control
account. The Philippines is the largest rice importing-country in
the world. It imports approximately 2 million tons or about 20 % of
its annual consumption. A rice shortage has occurred, because
Vietnam, a major rice exporter to the Philippines, began restricting
exports in late 2006 due to damage caused to rice crops by pests and
typhoons.

15) U.S. will not voluntarily refrain from exporting offspring of
cloned cows

MAINICHI (Page 2) (Full)
May 20, 2008

The Ministry of Health, Labor and Welfare (MHLW) and the Ministry of
Agriculture, Forestry and Fisheries (MAFF) yesterday held a public
hearing in Tokyo regarding the safety of cows, pigs cloned from
somatic cells, and the meat and milk of their offspring. The MHLW
during the hearing revealed that the U.S. had removed offspring of
cloned livestock from the list of animals subject to a voluntary
shipment ban. An MHLW official explained, "We have yet to assess the
real intention of the U.S., but such a possibility cannot be ruled
out." This official made this comment as a reason for his ministry
consulting on the matter with the government's Food Safety
Commission.

16) Prime Minister Fukuda plans to map out measures giving
preferential treatment to the elderly

ASAHI (Page 4) (Full)
May 20, 2008

Prime Minister Yasuo Fukuda decided yesterday to hammer out a plan
to give encouragement to the elderly. In order to prevent his
cabinet's approval rate among elderly people from declining further,
Fukuda is considering such policy measures as employment promotion
and preferential tax treatment. He plans to come up with some policy
measures in early June, setting up a project team headed by former
Chief Cabinet Secretary Kaoru Yosano.

Concrete measures being considered include: raising the compulsory
retirement age to more than 65; increasing pension benefits; tax
reduction for three-generation families; reinstating the tax-free
small-sum savings system for the elderly; promoting elderly people's
participation in non-profit organizations; promoting employment of
the elderly in childcare services; among other measures. Some policy
measures will be incorporated in "big-boned reform policy
guidelines."

In an executive meeting yesterday of the ruling Liberal Democratic
Party (LDP), Fukuda instructed Policy Research Council Chairman
Sadakazu Tanigaki to set up a project team, telling him: "I want you
to ease the mood as (the new medical care system for those aged 75
and over) has given the impression that the government has treated
elderly people coolly."

Fukuda told the press in a strong tone last night at the Prime
Minister's Official Residence (Kantei): "There are many elderly
people who want to do something. We have to take account of such
feelings."


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17) DPJ to submit to Upper House bill abolishing the new medical
care system for elderly as early as this week

YOMIURI (Page 4) (Full)
May 20, 2008

Democratic Party of Japan (DPJ) Upper House Diet Affairs Committee
Chairman Susumu Yanase yesterday told the press that his party will
submit to the House of Councillors as early as this week a bill
abolishing the new healthcare system for people aged 75 and over.
Yanase and his Liberal Democratic Party (LDP) counterpart Seiji
Suzuki reached an agreement yesterday to start deliberations on the
legislation during the current Diet session.

The bill, if it clears the Upper House, will be voted down by the
House of Representatives. However, the LDP has given consideration
to the DPJ, which wants to appeal its policy effort to the public.
By making such a concession, the ruling camp aims to secure
cooperation from the opposition bloc for passing
government-sponsored bills in the Upper House.

Meanwhile, a broad agreement was reached yesterday in the
Suzuki-Yanase meeting and in a meeting of senior directors from
relevant committees that four DPJ-sponsored bills would be put to a
vote successively in tandem with government-sponsored bills in the
Upper House. The four DPJ bills include a bill verifying the
consistency of special taxation measures.

18) Enactment of 10 bills difficult during current Diet session

ASAHI (Page 4) (Full)
May 20, 2008

The ruling Liberal Democratic Party and its coalition partner New
Komeito decided yesterday to carry over about 10 of the
cabinet-sponsored 79 bills to the next Diet session for
deliberations. The two parties have decided to forgo taking a vote
on bills to which the Democratic Party of Japan (DPJ), the largest
party in the House of Councillors, will likely oppose and
coordination will be difficult. The ruling coalition will continue
considering the handling of to a bill to reform the national civil
servant system, on which Prime Minister Yasuo Fukuda has instructed
the ruling coalition to take a vote.

LDP Upper House Diet Affairs Committee Chairman Seiji Suzuki and his
DPJ counterpart Susumu Yanase yesterday confirmed that it would be
difficult to pass about 10 bills.

The LDP and DPJ also agreed to take a vote on 8 bills submitted by
the LDP to the Upper House. As a result, about 80 % of the bills
submitted to the ongoing Diet session will clear the Diet. The %age
of passage of bills will likely be lower than the 90 % of the
average year due to the present lopsided Diet, in which the
opposition camp controls the Upper House and the ruling coalition
has the majority of the Lower House seats.

Bills considered difficult to pass include one reforming the public
pension system, a bill amending the special law on state subsidies
for the government-control healthcare program, a bill revising the
administrative complaint investigation law, a bill turning highly
advanced medical treatment facilities into independent
administrative institutions, a bill establishing organizations

TOKYO 00001367 012 OF 012


revitalizing regional economies. Bills, passage of which has
remained uncertain, include a bill amending the national civil
servant system, a bill revising the Juvenile Law, and a bill
reforming the Anti-monopoly Law.

19) Machimura faction unable to decide who will succeed Fukuda

MAINICHI (Page 5) (Excerpts)
May 20, 2008

Daisuke Kondo

The ruling Liberal Democratic Party's (LDP) Machimura faction late
yesterday held a gathering at a hotel in Tokyo, bringing together
some 5,000 persons, including senior members of other factions, and
demonstrated its influence as a faction that has produced four prime
ministers in succession, including incumbent Prime Minister Yasuo
Fukuda. But the faction has yet to determine who will succeed Fukuda
and remains unable to have any outlook for the faction. One senior
faction member complained: "The faction has not been unified well."

Former LDP Secretary General Hidenao Nakagawa, who is the faction's
manager, emphasized at the gathering: "I want to make a 'hero' or a
'heroine' from among our faction members in the future, as well." On
the other hand, Nakagawa noted, "Under the banner of reform, we must
take the lead in rallying forces beyond the borders of the Machimura
faction and the LDP," and indicated an intention to seize the
initiative in political realignment.

One reason why the faction has yet to determine who will succeed
Fukuda is because Chief Cabinet Secretary Nobutaka Machimura, who
serves as chair of the faction, has failed to garner support from
faction members. As for Nakagawa, too, he is taken by many faction
members as not being suitable for a candidate to succeed Fukuda
because he stepped down as chief cabinet secretary in the Mori
cabinet in part for a scandal involving a woman.

SCHIEFFER

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