Ruling Party Pumps Brakes on Prosecution Bill, Leveraged ETFs

■Shift in "Party-Presidential Office Unity" Stance Amid Voter Discontent Democratic Party Voices Opposition to Presidential Office Policies Calls for Caution on Fabricated Indictment Special Counsel Bill Party Also Asks Lee to Withdraw Inn Yo-han Appointment Party Says "No Problem in Party-Presidential Office Relations" Broader Response to Public Opinion as Approval Ratings Slide

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By Jin Dong-youngjin@sedaily.com
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Democratic Party leader Kim Min-seok (right) presents a plaque of appreciation to Rep. Jung Chung-rae, his predecessor as party leader, at a National Assembly lawmakers' workshop to prepare for the 2026 regular parliamentary session, held at Inspire Resort in Jung-gu, Incheon, on the 27th. Yonhap News - Seoul Economic Daily Politics News from South Korea
Democratic Party leader Kim Min-seok (right) presents a plaque of appreciation to Rep. Jung Chung-rae, his predecessor as party leader, at a National Assembly lawmakers' workshop to prepare for the 2026 regular parliamentary session, held at Inspire Resort in Jung-gu, Incheon, on the 27th. Yonhap News

The Democratic Party of Korea, which has long stressed unity between the party and the government, is increasingly and openly putting the brakes on government policies and President Lee Jae-myung's political judgments. Party insiders offer varying interpretations, but the prevailing view is that the shift does not yet amount to a rift between the party and the presidential office. Rather, the party is speaking up to stem an erosion of public support after approval ratings for both Lee and the Democratic Party fell together.

According to political sources on the 27th, the clearest example of the ruling party's changed posture is its handling of a special counsel bill targeting alleged fabricated indictments by prosecutors, including a provision to drop charges. Park Sung-joon, the party's chief spokesperson, recently proposed that the bill "should be passed during the regular parliamentary session in September," but party and floor leaders including policy committee chairman Kwon Chil-seung and deputy floor policy chief Kim Han-kyu pushed back, saying "there must be a public consensus." The change in tone is striking on an issue that had been a party priority — in February, 105 Democratic Party lawmakers formed a group to push for dropping the charges in Lee's cases.

Within the party, the view is that dropping the charges would be difficult to win public support for. With a pile of pressing livelihood issues, lawmakers worry about a backlash if what is perceived as Lee's "personal issue" appears to be the party's top priority.

On single-stock leveraged exchange-traded funds, which drew growing controversy as the stock market fell, the calls for accountability were more direct. Rep. Kim Young-jin, known as an original member of Lee's inner circle, said in a radio interview the same day that the bureaucrats and regulators who led the introduction of leveraged ETFs "introduced the policy in a short-sighted way." He added: "It is not appropriate to simply let this pass. Accountability is needed." The Democratic Party has taken up an argument about government responsibility that had been raised by the People Power Party.

On property taxes, the party called for specific policy changes. Democratic Party lawmakers from Seoul led growing objections to the government's Aug. 13 plan to lower the basic deduction on the comprehensive real estate holding tax for owners of a single home they do not live in, to 900 million won from 1.2 billion won. Party leaders also strongly demanded changes at a high-level party-government meeting on the 23rd.

The party has pushed back not only on policy but also on presidential office appointments. Party leader Kim Min-seok on the 25th asked Lee to withdraw the appointment of former People Power Party lawmaker Inn Yo-han as president of the Korean Red Cross. The request reflected mounting discontent among the party's core supporters over Inn's record, including his absence from the impeachment vote on former President Yoon Suk-yeol. In effect, the leader of the governing party blocked an appointment made in the spirit of national unity under Lee's central theme of broadening the party's appeal.

The ruling party's changed tone reflects a judgment that the drift in public sentiment is serious. In recent polls, Lee's approval rating has hit record lows in each survey, while the party's rating has stagnated. Opposition to key policy issues is also evident. In the National Barometer Survey conducted by Embrain Public, K-stat Research, Korea Research and Hankook Research from the 24th to the 26th and released on the 27th, 63% said Lee "should state that he will not run in the next presidential election." On the government's Aug. 13 property measures, 57% gave a negative assessment, saying they "will not be effective."

Still, the party's internal view is that this does not signal a rift with the presidential office. "There is no problem in relations between the party and the presidential office," a Democratic Party official said. "If public opinion on a policy is strongly negative, it has to be corrected, and the party is taking on that role."

Original reporting by Jin Dong-young for Seoul Economic Daily.

AI-translated from Korean. Quotes from foreign sources are based on Korean-language reports and may not reflect exact original wording.

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