The security cabinet unanimously voted on Thursday to increase the defense budget by NIS 2.75 billion, NIS 1.75b. less than the Defense Ministry had sought.

“We unanimously passed a decision that [strikes a] balance between the major security challenges facing the State of Israel and the need to continue responsibly piloting the Israeli economy in the face of the global economic crisis,” Prime Minister Binyamin Netanyahu said.

The cabinet also decided to establish a public committee to monitor the defense budget, and assigned Harel Locker, director-general of the Prime Minister’s Office, to lead a team to work out how to expedite the closure of IDF camps in the country’s center and free up land for building.

Finance Minister Yair Lapid had sought to maintain the defense cuts from a budget approved in July: NIS 3b. cut for 2013, and a further NIS 1.5b. for 2014.

“The prime minister decided to add to the defense budget despite my opposition to it in the discussion,” Lapid said, despite having voted for the final arrangement.

“I’m glad we managed to prevent the passage of the full amount that the defense establishment wanted, the NIS 1.75b. we need for dorms, for health, for education and for steps that will lead to lowering the cost of living.”

Defense Minister Moshe Ya’alon said that despite the increase, there were still gaps in the defense budget, and lashed out at Lapid for his attempts at further cuts.

The defense establishment cut NIS 3b. from its budget “out of an understanding that we need to play our part in tackling the deficit,” he said. “As we’ve explained all along, the gap created for us [by the originally-planned defense cut of NIS 4.5b.] led to an impossible reality, the significance of which is a substantial blow to security and to the economy, to an extent that could lead to an erosion of the IDF’s power and the firing of thousands of defense industry employees.”

Ya’alon criticized Finance Ministry officials for what he said was a cynical, “irresponsible, political” campaign that was filled with falsehoods, aimed at the “systematic and ugly delegitimization of the IDF’s career soldiers.”

The campaign exposed the salaries of career IDF soldiers in a “distorted and manipulative manner,” in order to whip up public opinion against them, Ya’alon charged.

According to the Prime Minister’s Office, the funds added to the budget were “surplus funds,” monies set aside during budgeting for incidental and emergency spending throughout the year.

Opposition leader Shelly Yacimovich (Labor) said the decision to cancel the budget cut was expected.

“It is very worrying that a decision to add NIS 2.75b. to the defense budget was made through political armwrestling among ministers,” Yacimovich stated. “It raises questions about the way the Netanyahu government makes decisions.”

The Labor leader called on Netanyahu to find billions for health, education, employment and welfare as he did for the Defense Ministry.

Meretz leader Zehava Gal- On said the Defense Ministry turned into “a juicer in uniform” and bashed Netanyahu and Lapid’s “shameful capitulation.”

“Every shekel added to the defense budget is taken from health, education and welfare,” she said. “The time has come for the prime minister to understand that real security does not start and end with tanks and reservists, and that the number of beds in hospitals, defense from street and domestic violence and employment and nutritional security are also urgent issues.”

Speaking to Ynet earlier in the day, Lapid said that cuts were necessary for Israel’s economic health, and argued that there was plenty of fat to trim from the IDF budget without jeopardizing national security.

“Everyone who’s done reserve duty in the past 20 years and was on an army base knows there’s room to cut at the IDF,” he said.

“We’re not saying we’re going to lay off the pilot who was supposed to have attacked Iran.”

On Tuesday, the Knesset Finance Committee approved a NIS 251.7 million increase to the defense budget.

Despite the bluster on budgetary problems, Lapid had some room to maneuver on increased spending. For one, the actual budget deficit for 2013 has been coming in well below the 4.65% target. For another, a new formula for calculating Gross Domestic Product, the measure of economic output against which fiscal targets are set, changed the parameters that the government was working with, giving him even more wiggle room.

Even with new calculations helping Israel meet its 2013 and 2014 deficit targets, however, the Bank of Israel warned that NIS 3.5b.

would still have to be cut from planned expenditures in both 2015 and 2016 to stay within spending limits, beyond which further cuts or tax increases would be necessary to keep the deficit sustainable.

The original budget cuts prompted the IDF to carry out a series of cost-cutting moves, including axing air force squadrons, shutting down tank and artillery units, and downsizing the Israel Navy. Between 3,000 and 5,000 career soldiers are being let go as well. All reserve duty and training has been called off for the remainder of 2013, while combat training for enlisted soldiers has been downsized.

Slashes in training activities for regular soldiers are also being felt in the IDF Home Front Command, the Engineering Corps and the Artillery Corps. Training programs for the Armored Corps will be cut by a number of weeks. The IDF also cut General Staff exercises this year.

Additionally, the Defense Ministry said it may be forced to slow down the development of the Arrow 3 anti-ballistic missile system, designed to intercept Iranian missiles in space, due to the budget cuts. Officials from the Defense Ministry held talks with the Finance Ministry, through the mediation of the Prime Minister’s Office, to search for ways to leave the program untouched.

The Defense Ministry also froze orders from Israeli manufacturers of the Merkava Mark 4 tanks and Namer armored personnel carriers.

On Thursday, the IDF began implementing a decision to pull soldiers out of front line communities near the northern and southern borders, a decision slammed by local authority heads as harmful to the security of local residents.

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