Democratic Party launches full review of W821tr budget, focusing on livelihoods and local finances

The Democratic Party of Korea has launched a full-scale review of next year's proposed budget of 821 trillion won ($614 billion). The party plans to focus on livelihood-related spending — including support for local government finances and public housing supply — while pushing back against the People Power Party's calls for sweeping cuts by highlighting the necessity of individual projects.

According to ruling party officials, the party leadership held a closed-door supreme council meeting Sunday afternoon to discuss next year's budget proposal and key legislative priorities. Kim Tae-seon, chief of staff to the party leader, said after the meeting that the Democratic Party would "continue consultations within the party and with the government on the major budget and legislative issues discussed" Monday.

Local fiscal strengthening was a central topic at the meeting. The leadership reviewed options for additional disbursements of local allocation tax and local education finance grants, as well as expanded central government support for fire department budgets. The party is understood to have leaned toward addressing the financial hardships voiced by local governments, which have flagged shortfalls in local tax revenues.

The leadership also exchanged views on expanding public housing supply, with discussions focused on easing the fiscal burden on local governments and strengthening support for residential stability and other livelihood issues.

The party also signaled it would actively counter the PPP's push for budget cuts. Park Seong-jun, the Democratic Party's chief spokesperson, told reporters after a closed supreme council session Monday that the PPP was "taking issue with the 162 trillion won future response fund," adding that the party was "thoroughly prepared" to defend it. "The future response fund is an investment in AI, youth and regions — it is about preparing for the future," Park said.

On the PPP's demand to cut 134 trillion won from the budget and repay government bonds, Park said the Democratic Party planned to "counter by presenting specific livelihood projects."

During the budget review process, the Democratic Party intends to frame the future response fund — seen as the most fiercely contested item — as "an investment to secure medium- and long-term growth engines, not simply an expansion of fiscal spending."

Democratic Party lawmaker Kim Hyeon-jeong said in a KBS Radio interview Monday that the fund was about "building a reservoir for future growth." On how the fund would be managed, Kim said the plan envisions investing about 45 trillion won across five sectors while setting aside around 107 trillion won for the future. Kim also rebuffed criticism that the fund ignored fiscal soundness, noting it includes a 12.5 trillion won reduction in government bond issuance.

The National Assembly's Budget and Accounts Special Committee is set to begin comprehensive policy hearings Wednesday and Thursday, followed by ministry-by-ministry reviews from Nov. 9 through Nov. 12, with the budget adjustment subcommittee convening from Nov. 16. The legal deadline for passing next year's budget is Dec. 2.