Fears grow over possible government shutdown

Fears are growing over a shutdown of the Korean government’s key functions next year, as the national budget bill for 2023 was still adrift, Thursday, a day before its deadline amid continued partisan gridlock.

The main opposition Democratic Party of Korea (DPK), which holds the majority in the National Assembly, is flexing its muscles to pass its own budget plan containing the key pledges of DPK Chairman Rep. Lee Jae-myung. The ruling People Power Party (PPP) is desperately resisting this move, saying that it is prepared to embrace a provisional budget limiting the government’s spending to the minimum level, which would curtail government functions as in a U.S. federal government shutdown.

The floor leaders of the PPP and the DPK had a meeting with National Assembly Speaker Kim Jin-pyo on the day to discuss the national budget, but failed to iron out their differences.

“We have asked negotiation representatives of the two parties to narrow their differences by Friday afternoon,” PPP floor leader Rep. Joo Ho-young told reporters after the meeting. “Depending on the result, we may be able to pass the budget proposal within the legally set deadline. Otherwise, we have no option but to embrace an abnormal situation.”

Joo said he told the Assembly speaker that the motion with the proposal to dismiss Minister of the Interior and Safety Lee Sang-min in order for him to take responsibility for the Oct. 29 Itaewon tragedy, is a subject of partisan dispute. Thus, chaos is inevitable if the Assembly holds a plenary session on the two issues on Thursday. On the other hand, DPK floor leader Rep. Park Hong-keun told reporters that the Assembly should hold a plenary session on Thursday in order to pass the national budget and other bills that are waiting for votes.

“The PPP claims that it cherishes bills related to the public livelihood, but it actually is avoiding a plenary session, which is a double standard,” Park said.

The comments came just a day before the legally set deadline for the Assembly to pass the government’s budget for next year.

Since the DPK holds the majority in the Assembly, the party wants to hold a plenary session before the deadline and pass budgets containing the party’s interests.

The PPP, however, is against holding the session, because the DPK’s plans are about cutting the amounts allocated for the Yoon Suk-yeol government’s key projects, such as expenditures related to the relocation of the presidential office.

Also, the two parties are locking horns over budget spending for local business vouchers, public rental housing, nuclear power industry rehabilitation and a slew of other items, arguing for the need to cut each other’s respective budget proposals.

As the floor leaders have failed to narrow their differences, chances are high that next year’s budget may not pass in the Assembly before its legally set deadline.

There have been multiple precedents that the rival parties failed to reach an agreement on the national budget before its legally set deadline. The parties can continue negotiations and make adjustments to the government proposal after the deadline, but this should be done before the New Year, because the National Assembly’s fiscal year starts on Jan. 1 every year.

If the Assembly fails to approve a national budget before Jan. 1, the government will begin its operations based on a provisional budget. Since it is designed to limit the government’s spending at the minimum level, many of government functions will be put on a halt.

The government has proposed 639 trillion won ($491.3 billion) as next year’s budget, and at least 280 trillion won of the spending will be prohibited if the government runs on a provisional budget, including most childcare subsidies and job creation programs.

Since the provisional budget will also deal a hefty blow to the country’s credibility in the global financial market, past Assemblies have managed to end their partisan gridlock before the end of the year and passed plans.