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Japanese Cabinet OKs Budget Bill

December 24, 2000

TOKYO (AP) _ Prime Minister Yoshiro Mori’s Cabinet approved a national budget Sunday that trims overall spending for the first time in six years but boosts defense spending _ a move that could worry Japan’s neighbors.

The budget bill, which is unchanged from a draft adopted on Dec. 20, is expected to be sent to parliament in January and approved before the end of March, when the current fiscal year ends.

It calls for $734 billion in total spending in the fiscal year starting in April, down 2.7 percent from fiscal year 2000′s budget.

The smaller budget comes amid calls for the government to scale back spending and the reliance on borrowed money as the nation’s debt balloons to all-time highs. Major cuts are planned in pension outlays and overseas development aid.

One area that avoids cuts is defense, where spending will increase 0.4 percent to $44 billion as part of a five-year plan to expand Japan’s role in disaster relief operations and fund research into extending the flight range of the air force.

Any signs that Japan may be seeking to beef up its military tend to arouse the suspicions of many Asian countries where memories of Japan’s brutal World War II invasions remain fresh.

With the economy still struggling to emerge from its deepest economic downturn in decades, the government plans to increase spending on economic stimulus measures, including support for small businesses.

``I think that at some point next year private demand will recover,″ Finance Minister Kiichi Miyazawa said. ``This budget was compiled with the aim of ensuring that.″

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