Jang Dong-hyeok Says Cutting the Supplementary Budget Is ‘Co-governance’... President Lee Calls It ‘Excessive’

[Financial News] Jang Dong-hyeok, leader of the People Power Party (PPP), on the 7th directly called on President Lee Jae-myung and Jeong Cheong-rae, leader of the Democratic Party of Korea (DPK), to cut the supplementary budget currently under review in the National Assembly. President Lee countered that the opposition’s criticism of it as a “cash handout” was excessive and stressed the necessity of the supplementary budget programs, including the High Oil Price Damage Relief Fund.
At the luncheon meeting of party leaders and floor leaders hosted by President Lee at Cheong Wa Dae that day, Jang said, “A scheme that hands out cash to 70% of the people will instead have a negative impact on inflation and the exchange rate,” pointing to several projects included in the supplementary budget. He added, “Our party has proposed only those projects that are truly necessary, while cutting inappropriate spending. That is the starting point of co-governance.”
Earlier, the PPP had proposed replacing the High Oil Price Damage Relief Fund for 70% of the population with a plan to provide a fuel subsidy of 600,000 won per person to 1.23 million livelihood-dependent commercial vehicle operators, including truck, taxi, and delivery drivers and food truck operators. The party also put forward seven alternative projects, such as support to ease the cost burden on small business owners for purchasing delivery and takeout containers.
Jang also pointed out that the surge in oil prices caused by the 2026 Iran War, which has driven the exchange rate sharply higher, is fundamentally linked to an expansion of money supply in the market and a decline in foreign exchange reserves. He went on to say, “We must now be cautious about further increasing the money supply,” and urged, “It is time for President Lee to step forward personally to conclude a dollar swap with the United States and prepare more proactive measures.”
In response, President Lee said, “We prepared the High Oil Price Damage Relief Fund to help the bottom 70% of income earners cope with the difficulties caused by the sharp rise in fuel prices, so to call this a ‘cash handout’ is an excessive expression.” He emphasized, “We are using tax revenues that increased more than expected as the economy partially recovered in the second half of last year thanks to our best efforts.” He did not respond to the suggestion that fiscal expansion be restrained in light of exchange rate concerns or to the proposal for a dollar swap with the United States.
Jeong Cheong-rae, leader of the DPK, replied that some of the projects criticized by the PPP, such as the budget to support Traffic Broadcasting System (TBS), could be withdrawn. However, he asked for the PPP’s cooperation, arguing that key policies, including the High Oil Price Damage Relief Fund, are urgent. The DPK plans instead to expand the size of the supplementary budget, for example by increasing compensation for the price gap in Naphtha imports as the Middle East crisis deepens.
On real estate issues, Jang noted that while housing prices in areas with many high-priced homes, such as Gangnam District, have fallen somewhat, prices in other regions have risen more sharply due to a balloon effect. As a result, he said, the tax burden is growing, yet it is difficult for owners to sell because of the Land Transaction Permit System and loan regulations, while tenants are struggling with rising jeonse and monthly rents.
Jang said, “As the saying goes, the road to hell is paved with good intentions. Whatever President Lee’s intentions may be, people on the ground are finding life increasingly difficult,” and suggested, “We need to expand supply by revitalizing redevelopment and reconstruction, and roll back excessive regulations that distort the market.”
He also referred to the Parliamentary Inquiry into Alleged Fabricated Prosecution under the Yoon Suk Yeol administration, saying, “Among the public, people are asking whether inflation will fall if President Lee’s indictment is dropped.” Citing how former U.S. President Donald Trump criticized South Korea for not helping in the 2026 Iran War, while Kim Yo Jong, Director of the General Affairs Department of the Workers' Party of Korea, praised President Lee as “candid and bold,” he pressed, “Please reflect on whether our current foreign and security policy line is the right one.”
In response, Jeong listed what he described as the administration’s achievements, including a sharp rise in stock prices, record-breaking export figures, a rebound in economic growth, the administrative integration of South Jeolla Province and Gwangju Metropolitan City, and efforts to stabilize oil prices through an oil price cap system. He also stressed that alleged state-violence crimes related to the fabricated prosecution case must be investigated and clarified as swiftly as possible.

uknow@fnnews.com Kim Yun-ho Reporter