A fierce battle has erupted in the Seoul Metropolitan Council over the so-called "war supplementary budget" proposed by the Lee Jae-myung government.
The Democratic Party of Korea and the People Power Party (PPP) caucuses in the Seoul Metropolitan Council issued statements on the 3rd and the 7th respectively, putting forward opposing claims — calling the budget a "debt-free supplementary budget for citizens" and "a gimmicky shell game."
The Democratic Party of Korea (floor leader Seong Heum-je) said first: "We deeply sympathize with the purpose and direction of this 26.2 trillion won supplementary budget designed to mitigate the shock of the Middle East war, and we welcome the government's swift and bold decision."
The party also stressed that the budget constitutes a so-called "debt-free supplementary budget," saying it "was funded using 25.2 trillion won in excess tax revenue and 1 trillion won from fund reserves without issuing government bonds." The party said the measure is significant in that it provides substantive support to citizens who need a safety net right now while maintaining fiscal soundness.
In response, the PPP (floor leader Lee Seong-bae) issued a statement under its spokesperson's name, calling it "a brazen deception and shameless sophistry in an era when national debt stands at 1,304 trillion won and per-capita debt at 25.24 million won." The party dismissed the budget, saying "the true nature of this supplementary budget that the Democratic Party praises is nothing but a thorough 'gimmick.'"
The PPP further argued: "When excess tax revenue occurs, at least 51% must be used to repay national debt under the National Finance Act. Diverting money meant to cover the overdraft to throw a debt party while talking about 'fiscal soundness' is a malicious act of deception no different from actual government bond issuance."
The two parties also revealed disagreements over the bottom 70% income threshold and the method of distribution.
The Democratic Party said: "The high oil price damage relief payments to be distributed to approximately 36 million citizens in the bottom 70% income bracket are expected to significantly help compensate for the decline in real income caused by rising prices." It added: "Distribution through local currency is expected to stimulate local consumption and have a positive impact on revitalizing neighborhood economies."
The PPP countered: "The cash handout to the bottom 70% income bracket, using people's livelihoods as a pretext, is nothing more than vote-buying with local elections just around the corner." The party questioned whether this is what the Democratic Party calls "reinforcing local finances," saying: "To match the central government's self-congratulatory gesture, local governments are being forced to squeeze out a massive 1.3 trillion won in taxpayer money against their will."
Regarding local finances, the Democratic Party responded that this supplementary budget also includes measures to supplement local governments' fiscal conditions. The party said 9.4 trillion won in local allocation tax was committed to expand local governments' investment resources, enabling field-level responses tailored to regional conditions. It evaluated the measure as meaningful in strengthening local response capabilities while maintaining the principle of fiscal decentralization.
The PPP argued regarding the method of support: "If the concern is truly people's livelihoods, common sense dictates lowering fuel taxes to reduce prices people actually feel and providing concentrated support to affected sectors such as small business owners, rather than one-time cash handouts."
In response to such claims, the Democratic Party emphasized: "The budget allocation was carried out systematically, consisting of 10.1 trillion won for a high oil price burden relief package, 2.8 trillion won for livelihood stabilization, 2.6 trillion won for minimizing industrial damage and stabilizing supply chains, and 9.7 trillion won for reinforcing local finances."
Finally, the PPP caucus in the Seoul Metropolitan Council warned: "The hypocrisy of the Democratic Party, which has reduced national finances to gambling stakes for elections while hiding behind the mask of 'people's livelihoods,' will not escape the stern judgment of Seoul citizens." The Democratic Party emphasized: "We will continue to actively cooperate with the government and fulfill our role in stabilizing the lives of Seoul citizens throughout the crisis response process."