D-Day for 2025 Budget Proposal... Democratic Party Pushes for '4.1 Trillion Won Cut'

Budget Cut Proposal Likely to Pass in Plenary Session on the 10th Afternoon
Additional Reductions on Hold... Cuts to Contingency Funds and Special Activity Expenses
Abolition of Financial Investment Tax and Postponement of Virtual Asset Taxation Also Processed

On the 10th, the last day of the regular National Assembly session, the Assembly is set to process the 2025 budget bill. The Democratic Party of Korea plans to pass a revised budget bill reflecting only cuts from the government-submitted proposal.

This day is the 'D-Day' for the budget agreement proposed by Speaker Woo Won-sik. The Democratic Party is determined to pass the 2025 budget on this day. Accordingly, the plenary session is expected to present the budget bill with a 4.1 trillion won cut that the Democratic Party forcibly processed last week. Lee Jae-myung, the Democratic Party leader, stated, "Today, the last day of the regular session, the Democratic Party will complete the budget bill processing." He added, "The budget is directly connected to the lives of the people," and "Swift budget processing will help alleviate the current anxiety and crisis, even if only slightly."

Floor leader Park Chan-dae also formalized the supplementary budget (추경) plan. He said, "If there are parts that require increases for people's livelihood and economic recovery, they can be addressed later through supplementary budgets or other means." This means that the budget demand will be based on the budget reflecting only cuts, and additional necessary funds can be allocated in early to mid-next year. The Democratic Party's floor leadership is expected to support the plenary session submission considering this situation, even at the Speaker's office.

Earlier, the Democratic Party forcibly passed a revised budget reflecting only cuts from the government's 2025 budget proposal at the Budget and Accounts Committee on the 29th of last month. The Democratic Party claimed it was to meet the legal deadline for budget processing, but it was unprecedented in history. In response, Speaker Woo on the 2nd withheld the submission of the 'cut budget' to the plenary session and asked both parties to prepare a consensus by the 10th. However, with the 12·3 emergency martial law incident unfolding, negotiations between the ruling and opposition parties completely stalled and only resumed the afternoon before.

However, regarding the '7 trillion won additional cut' mentioned by some, no concrete proposal was presented at the negotiation table involving the Ministry of Economy and Finance and both parties. The Democratic Party pushed for an impeachment motion against President Yoon on the 7th but failed due to the People Power Party's absence, and plans to submit the motion again on the 14th. During this process, as President Yoon's actual authority diminished, voices called for an additional 700 billion won cut in the presidential office staff salaries and the Ministry of Unification's project budget. However, at the request of Prime Minister Han Duck-soo, the additional cuts were put on hold.

Democratic Party of Korea lawmakers, including leader Lee Jae-myung, are holding a rally urging impeachment and condemning the People Power Party after the vote on the impeachment motion against President Yoon Seok-yeol was defeated at the National Assembly on the 7th. Photo by Kim Hyun-min

According to the Democratic Party's proposal processed last week, 4.1 trillion won was cut from the government's total expenditure budget of 677.4 trillion won. The reduced budget includes ▲2.4 trillion won in contingency funds ▲500 billion won for national treasury bond interest repayment ▲50.691 billion won for prosecution special task expenses (특경비) ▲22.9 billion won for Yongsan Park budget ▲8.09 billion won for prosecution special activity expenses (특활비) ▲8.251 billion won for presidential secretariat and national security office special activity expenses ▲4.5 billion won for Board of Audit special task expenses ▲1.5 billion won for Board of Audit special activity expenses, among others.

At the plenary session, the tax law amendment bill for next year, including the abolition of the financial investment income tax (금투세) and the postponement of virtual asset taxation, is also expected to pass. Lee Eon-ju, a Supreme Council member in charge of the Emergency Economic Situation Inspection Team within the Democratic Party's 'Special Committee on Internal Rebellion,' said the day before, "We will process the budget-related bills along with the abolition of the financial investment income tax and the postponement of virtual asset taxation at the plenary session." He added, "The Democratic Party will eliminate structural factors causing the 'Korea Discount' in the stock market by abolishing the financial investment income tax and amending the Commercial Act to ease investor anxiety."