Skyrocketing cost of US bases in Japan becomes political issue

For the past year, American officials have pushed and cheered the rapidly rising value of Japan's currency, the yen. Now they are seeking Japan's help in redressing the impact of that change in at least one vital area - defense costs. The yen rise has greatly increased the cost of the United States' military facilities in Japan. The yearly cost of the wages of the US bases' 21,000 Japanese employees has risen during the past year by about $250 million because of the 50 percent climb in the yen's value against the dollar, says a US official here.

Without increased funds, layoffs of some of those workers are in the offing, the official warns.

When Japanese Defense Agency Director-General Yuko Kurihara visited the US in September, the US pressed him with ``a strong request ... that Japan should make more efforts in cost-sharing,'' a Foreign Ministry official says.

A US official here says, ``We have asked them to do what they can - not necessarily the entire difference as they have their budget realities, too.'' Japan currently contributes 16.8 percent of the bases' labor costs - about $703 million dollars - in addition to an annual $370 million in maintenance and improvement of base facilities.

The problem threatens to become a political issue in both countries. Last August, Sen. Robert Byrd (D) of West Virginia, soon to become Senate majority leader, sent a letter to President Reagan arguing that because of the increase in the yen's value, Japan should have greater resources to devote to defense. According to a US official, Senator Byrd suggested that Japan could step up the tempo of its equipment purchases and increase support for base labor costs.

The Byrd letter, US officials here acknowledge, had some impact on the US decision to ask Japan for help.

Japanese Foreign Ministry officials say they want to respond to the US request, but it poses serious political and legal problems for them. A significant added contribution would push the defense budget for next year over Japan's politically sensitive 10-year-old policy of limiting defense spending to 1 percent of the gross national product.

More cost-sharing might also require new legislation. It could even mean a major decision to change a US-Japan bilateral security agreement for the first time since 1960, a Foreign Ministry official says. If the government has to ask for parliamentary approval of what it decides, the official insists, it would make this a ``bigger defense issue than SDI,'' referring to Japan's decision to join the US's Strategic Defense Initiative. It would open the door to a political confrontation with the left-wing opposition parties.

``We recognize the poltical need to do something about this thorny question, but we are unable to find a formula to justify the decision at this point.'' A decision must be made by the end of December, when the government finalizes its proposed budget for the next fiscal year.

At this point, a Foreign Ministry official says, the government ``is undecided.'' The Defense Agency, an official there says, revised its final budget proposal to include an additional $100 million for the US bases labor. The Finance Ministry opposes the increase on budgetary grounds.

The Foreign Ministry is particularly concerned with the legal barrier posed by the Status of Forces Agreement signed in 1960. That agreement states that the US will bear ``without cost to Japan all expenditures incident to the maintenance of the United States forces in Japan'' except those related to providing the actual base areas and facilities. Under SOFA, the US paid all the labor costs until the late 1970s.

The Japanese government decided to make an exception to this clause in the late '70s because of the appreciation of the yen at that time.

The Japanese flexibly interpreted it to allow them to pay costs other than wages, such as social insurance required under Japanese law.

US officials here are encouraging Japan to ``flexibly reinterpret'' the document, avoiding any legal changes. Japanese officials say there is no more room to stretch the meaning, adding that parliament was told that the late-'70s move was a one-time exception.

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