Office of the President and Ruling Party Agree on Extra Budget, But Discomfort Remains Evident

Ruling Bloc Opposes Nationwide Cash Payouts in 35 Trillion Won Extra Budget Proposal
Disagreement Over Scale, Timing, and Method
Concerns Over Turning Fiscal Policy Into a Political Issue

Kwon Seongdong, floor leader of the People Power Party, is speaking at the floor strategy meeting held at the National Assembly on February 14, 2025. Photo by Kim Hyunmin

The Office of the President and the People Power Party have not concealed their discomfort regarding the supplementary budget (extra budget) proposal put forward by the Democratic Party of Korea. The ruling bloc also acknowledges the necessity of an extra budget to stimulate the economy and address sluggish domestic demand. However, there is a prevailing sentiment that the scale, timing, and method of the extra budget proposed by the Democratic Party are difficult to accept. In particular, they have made it clear that they cannot accept the inclusion of the "Livelihood Recovery Consumption Coupon," which would provide 250,000 won per person to all citizens. Previously, President Yoon Suk-yeol directly criticized Democratic Party leader Lee Jaemyung's proposal for a "National Livelihood Recovery Support Fund," calling it "reckless cash handouts and populism."

The ruling bloc agrees on the need for an extra budget because of the growing difficulties in the livelihood economy, as well as changes in domestic and international conditions, such as the intensification of trade disputes expected under a potential second Trump administration in the United States. However, the prevailing view within the ruling bloc is that providing 250,000 won equally to all citizens will not resolve the issues. They argue that targeted support for groups facing greater hardship, such as small business owners and vulnerable populations, is urgently needed.

While the Office of the President cannot officially comment on the extra budget due to President Yoon's suspension from duty, it has maintained the position that "targeted support" for vulnerable groups is more effective. An official from the Office of the President stated on February 14, "Regarding the extra budget, our position is the same as that of Choi Sangmok, Acting President and Deputy Prime Minister and Minister of Economy and Finance," adding, "The basic principles of the extra budget should be discussed through a policy council with participation from both the ruling and opposition parties." Acting President Choi previously reaffirmed the stance that "the execution of the existing budget should take priority," and insisted that, along with discussions on the extra budget, the "Special Act on Semiconductors" and the "Three Energy Laws" (Special Act on Power Grid Expansion, High-Level Radioactive Waste Management Act, and Offshore Wind Power Special Act) should also be addressed.

There is particularly strong concern that discussions about the extra budget, which should prioritize livelihood and economic recovery, are turning into a "political issue" related to the early presidential election. The ruling party is also closely watching the unusual move by the Democratic Party to announce its own extra budget proposal first and seize the initiative on the issue, even though budget bills are typically submitted by the government and then reviewed by the National Assembly. A key official from the ruling party criticized, "President Yoon has consistently opposed reckless cash handouts and populism, saying last year that such measures would ruin the country's future," and added, "At this point, the extra budget is essentially an attempt to buy votes with taxpayers' money."

The Bank of Korea, which had previously advocated for the need for an extra budget to stimulate the economy and address sluggish domestic demand, is also taking a cautious stance toward the Democratic Party's proposal. The Democratic Party estimates that 35 trillion won is needed-24 trillion won for livelihood recovery and 11 trillion won for economic growth-which far exceeds the 15 to 20 trillion won mentioned by Bank of Korea Governor Rhee Changyong.

On this day, Kwon Seongdong, floor leader of the People Power Party, pointed out, "The excessive issuance of local gift certificates has only a minimal effect on boosting consumption and places a tremendous burden on national finances. That burden will become debt that future generations must shoulder." In contrast, Park Chan-dae, floor leader of the Democratic Party, said, "The government and the People Power Party must actively cooperate for a swift extra budget in order to relieve the despair of people's livelihoods, which are frozen solid."