While President Lee Is Abroad, Blue House Scrambles to Tackle Domestic Risks Overshadowing Achievements

Blue House Aides Mobilize to Contain Domestic Controversies Over Presidential Re-election Amendment
Ongoing Issues: Jung Sung-ho's Tenure, Stock Market Decline, and Real Estate Tax Reform

While President Jae Myung Lee was overseas in the United States and South America to expand cooperation in artificial intelligence (AI), semiconductors, and the core mineral supply chain, a number of domestic issues—such as the controversy over constitutional reform for presidential re-election, the status of Minister of Justice Jeong Seongho, a sharp decline in the stock market, and real estate tax policy—came to the forefront all at once. As the achievements of the overseas trip are being overshadowed by domestic concerns, the Blue House and the government’s ability to manage state affairs in the president’s absence is also being put to the test.

Cheong Wa Dae Panorama

On July 29, the Blue House devoted its full efforts to blocking the controversy over constitutional reform for presidential re-election. After National Assembly Speaker Cho Jungshik remarked that amending the Constitution to allow the current president’s re-election should be a matter for the people to decide, the opposition intensified its criticism, prompting Kang Hoonshik, Chief Presidential Secretary, Hong Ikpyo, Senior Presidential Secretary for Political Affairs, and Sung Kihong, Senior Presidential Secretary for Public Communication, to publicly respond in succession.

During a meeting with reporters at the Blue House the same day, Chief Secretary Kang stated that President Lee has repeatedly said regarding re-election constitutional reform, “Korea’s constitutional system does not allow for it, the people will not tolerate it, and it is realistically impossible.” He explained that this has been President Lee’s position since his candidacy for the presidency. Chief Secretary Kang went on to comment that Article 128, Paragraph 2 of the Constitution—which stipulates that the president cannot benefit from a proposal to extend the term or modify the limit on re-election while in office—is, “personally speaking, a historical consensus that must never be unsettled in the future.”

Senior Secretary Hong focused on halting political speculation. Appearing on MBC Radio’s “Kim Jongbae’s Focus,” he stated that there had never been discussions between the president’s office and the National Assembly Speaker’s office regarding re-election constitutional reform, saying, “I have never given a thought to constitutional reform for re-election.” When asked whether the attempt to link political reorganization and constitutional reform for presidential re-election should be considered a conspiracy theory, he replied, “Yes.”

Later that afternoon, when meeting with reporters at the National Assembly, Senior Secretary Hong stated, “Speaker Cho has already given a full explanation, and both the Blue House and the Democratic Party have made it clear that not only is it impossible under the current Constitution, but there is also no such intent,” moving to stem the spread of the controversy. Addressing the People Power Party, he said, “We deeply regret creating an environment that makes it difficult for the president to focus on diplomatic affairs. It is advisable to now refrain from unnecessary political attacks.”

Senior Secretary Sung also moved to calm the situation. Appearing on SBS’s “Joo Youngjin’s News Briefing,” he said that constitutional reform to extend a sitting president’s term is “impossible and unrealistic under the current provisions of the Constitution,” adding, “I don’t think the public would accept it.” He further stated regarding Article 128, Paragraph 2, “This is a historic agreement we must uphold, and the will of the people is reflected in that provision.”

Meanwhile, the debate over the position of Minister Jeong Seongho continues as prosecutorial reform enters its final phase. Minister Jeong attended the National Assembly’s Legislation and Judiciary Committee’s plenary session on July 27, noting that most of the prosecutorial reform had been completed and remarking, “New wine should be put into new wineskins.” This was interpreted as an effective expression of his intention to step down, coinciding with the ruling party’s decision to adopt the abolition of supplementary investigative powers as its official policy, which led to various analyses regarding the nature of government-party relations. In response, the Blue House clarified that Minister Jeong's resignation had not been communicated through official procedures.

The Blue House maintained its stance that no official resignation had been submitted as of that day, while indicating the necessity of his continued presence. Senior Secretary Hong said, “The legal ministry is the main supervisory authority for the Public Prosecution Office, which must be established by October,” implying that Minister Jeong should serve until the new institution is stabilized. Senior Secretary Sung added, “A public office is not one you can just resign from whenever you wish.”

Adding to these issues were concerns over the stock market and real estate. Circuit breakers were triggered repeatedly in both the KOSPI and KOSDAQ markets due to high volatility. Analysts cite several independent factors, including advances in Chinese semiconductor technology, weakness in global semiconductor stocks, and excessive flows into leveraged products, which have combined to ice over market sentiment.

In response, Kim Yongbeom, Blue House policy chief, gave a briefing from Brazil, where President Lee is on a state visit, diagnosing the stock market downturn as part of the market’s revaluation process surrounding the AI sector and stating, “While some people claim that nearly all the problems are due to a single leveraged exchange-traded fund (ETF), that is not entirely the case.” He did, however, state that the authorities will be reviewing structural factors such as the share of individual investors, derivatives, and capital concentrated in large semiconductor stocks.

A real estate tax reform is also imminent. The Democratic Party and the government are planning to announce the tax reform plan as early as early August following a closed meeting between the government and the ruling party on the 30th. The proposals being discussed include shifting the basis for the comprehensive real estate holding tax from property count to property value, revising the tax burden and capital gains long-term holding special deduction for non-resident owners of ultra-high-priced single homes, and ensuring the middle-class owner-occupiers do not face a heavier burden.

A Blue House official commented, “We hope President Lee's overseas trip will get greater attention,” adding, “We are always keeping a close watch on domestic issues.” A ruling party official stated, “While the AI, semiconductor agreements, and core mineral supply chains are achievements for future growth engines, it will take time for these to result in actual investment and jobs. In contrast, a stock market drop is immediately reflected in investors’ accounts, and real estate tax reform is a highly sensitive issue, as it is directly tied to household burdens. This is a situation where the Blue House and the government’s ability to manage state affairs in the president’s absence is being put to the test.”

This content was produced with the assistance of AI translation services.