Japan Passes $50 Billion Disaster Budget

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Japan passes a $50 billion emergency budget to pay for disaster cleanup after the March 11th earthquake and tsunami. The total rebuilding cost is expected to be around $300 billion.

On Monday, Japan's parliament passes a $50 billion emergency budget for disaster relief after the March 11 earthquake and tsunami. It's just a down payment on what will be the country's biggest public works effort in six decades.

The budget passed unanimously in the lower house last Saturday and passed the opposition controlled lower house on Monday.

The overall cost of damage caused by the world's costliest natural disaster is estimated at $300 billion.

The emergency budget will be followed by more reconstruction spending packages.

But future funding is expected to involve a mix of tax hikes as well as borrowing in the bond market.

Prime Minister Naoto Kan says Japan may have to issue fresh government bonds to fund further supplementary budgets.

That will require opposition support, and Japan already has public debt twice the size of its $5 trillion economy.

His ruling Democratic Party lacks a majority in the upper house meaning any of its bills can be blocked.

The first extra budget will be financed through spending cuts in existing programs ranging from foreign aid to pension funds and family payments.

The magnitude 9.0 earthquake and tsunami left around 26,000 dead or missing, destroying tens of thousands of homes and the Fukushima nuclear power plant.