Japan Reaches Tax Deal That Could Help Shrink Debt TOKYO - In a deal that could lead to Japan's first substantial steps toward reducing its burgeoning debt burden, Prime Minister Yoshihiko Noda agreed with the country's two largest opposition parties Friday on legislation to double the country's consumption tax. Mr. Noda has staked the fate of his administration on the bill, which would double Japan's five-percent sales tax by 2015, hinting that he could call a general election if the plan fails to pass parliament before the current session ends next week. During weeks of negotiations, Mr. Noda argued that Japan must raise taxes to shore up its social welfare and pension systems, which have come under growing strain as the country's population ages. Japan's public debt has already grown to over twice the size of its gross domestic product as social welfare spending grows and tax revenues dwindle in a deflationary economy. But Mr. Noda clashed with the two main opposition parties, as well as critics from within his own Democratic Party, over other clauses in the bill, including those that would overhaul the social security system. Late Friday, Mr. Noda's camp reached a deal with the country's two largest opposition groups - the Liberal Democratic Party and the New Komeito Party - after promising to limit a social security overhaul. Off the table for now, in particular, are plans to set a guaranteed minimum pension and to revamp health care funding for people ages 75 and older. But the compromises have raised the ire of many lawmakers from within the ruling party, including former Prime Minister Yukio Hatoyama and the former party leader Ichiro Ozawa, who charge that the party is reneging on promises made when the Democrats swept to power in 2009. Critics also warn that raising taxes would snuff out Japan's economic recovery, just starting to gather steam a year after the natural and nuclear disasters last year. Still, it was "epoch-making that our three parties have agreed on a unified reform, which is of great significance for Japan's future social welfare and its economy," senior Democratic Party legislator Hirohisa Fujii was quoted by Reuters as telling reporters after the deal. Under the legislation, Japan's 5 percent consumption tax would be raised to 8 percent in April 2014, and to 10 percent in October 2015. Japan last raised the consumption tax rate from 3 to 5 percent in 1997. A sales tax hike and social welfare reform could put the Japanese government on a road to more fiscal austerity, though the measure would go only so far in tackling the country's heavy debt burden. The Organization for Economic Cooperation and Development says Japan's public debt will reach 223 percent of the country's gross domestic product next year, the highest such ratio in the world.