On the face of it, it’s déjà vu all over again.
The IDF and the Treasury have been routinely exchanging snipes and even artillery salvos since Israel’s infancy, so much so that when there was a lull in their skirmishes it was often a sign that out in the real world, real war had flared.
These days, however, the fiscal antagonists’ fighting has become hand-to-hand combat, which is as fiscally unprecedented as it is militarily dangerous and politically alarming.
The air force’s cumbersome leaks this week, that next week it will halt most of its routine flights, and IDF Chief of General Staff Lt.-Gen. Benny Gantz’s statement last week, that ground forces’ training for the remainder of the year is suspended, raise harsh questions as to political control of the military – even regardless of this financial Armageddon’s eruption, against the backdrop of turbulence across the Middle East.
THE FISCAL CONTEXT is simple. With GDP at some $250 billion and defense spending at just over 6 percent of that, it is much lower than its historic peaks of nearly 20% in the early 1980s and 30% after the Yom Kippur War. However, it remains higher than its levels elsewhere in the industrialized world, where Russia, with 4.1% of GDP, is the highest defense spender, followed by the US with 3.8%, South Korea with 2.8%, Turkey and the UK with 2.3% each and France with 2.2%.
At 13% of its budget, Israel’s per capita defense spending is by far the free world’s highest, a good 20% higher than the education budget, which is the Jewish state’s second-highest budget, and more than twice the health budget, which is the third-highest.
Moreover, after having stagnated for several years, since Binyamin Netanyahu’s term as finance minister a decade ago, the defense budget grew rapidly during Ehud Barak’s six years as defense minister – when military spending swelled more than 10%, from NIS 47b. in 2007 to NIS 52b. in the biannual budget that Moshe Ya’alon inherited last year.
These numbers alone, even before considering other circumstances, explain the Treasury’s quest to offset, or at least stem, the defense budget’s growth, a trend which ignored the long-term formula adopted by the Ehud Olmert government – whereby defense spending was to grow annually until 2017, by no more than half the overall-budget’s growth.
Additionally, the growth in defense spending came in tandem with the growth in the public’s demand for increased social spending.
This is where the Treasury’s current agenda is a novelty to the generals. Finance Minister Yair Lapid, unlike his predecessor Yuval Steinitz, is in his job not as Prime Minister Netanyahu’s loyalist, but as the independent leader of a civic party for which changing spending priorities has been a battle cry.
As seen from Lapid’s cockpit, the army is a fat cat whose excessive resources are a major cause of the high cost of living that in 2011 made the middle class take to the streets, two years before Netanyahu lost 11 Knesset seats while Lapid won 19.
The defense budget’s ailments are structural and historic.
The most obvious of these are the pensions. As the country’s largest employer, the IDF is spending NIS 12.5b. on salaries this year, including NIS 7.4b. on pensions. As this figure is more than the army spends annually on procurement, it is arguably a symptom of organizational disease. This is what happens in workplaces that increasingly dedicate more resources for taking care of their employees than for carrying out their missions.
This is not to say that the IDF’s commanders have lost sight of its missions. Even its most cynical critics realize that the standing army’s combat officers, from captains to generals, risk their lives, work around the clock and see their families much less than the busiest banker, lawyer or hi-tech engineer – and that all this must be rewarded generously.
Also, no one disputes that monthly payments to wounded veterans and to families of fallen soldiers must remain untouched and sacred.
Furthermore, no one disagrees that combat officers’ retirement at age 45 – meaning they start collecting pensions at mid-career – is socially justified, if fiscally expensive. And everyone understands that the military must bear costs that no civilian system will ever face, from buying fighter jets to fueling submarines and feeding hundreds of thousands of people daily.
Moreover, the most urgent structural reform the army’s salary system begged has already been applied a decade ago, when its pensions were converted from a budgetary to a cumulative system. This means that an officer’s pension is no longer an automatic multiple of his or her last salary, but the sum of monthly deductions throughout the years.
Even so, NIS 52b. is a lot of money and 13% of the budget cannot possibly be too little, and in fact is too much, says the Treasury. And the public, in today’s social atmosphere, can be counted on to agree.
With economic awareness and impatience having grown considerably in recent years, the IDF can no longer sell, for instance, its non-combat officers’ retirements at age 47. Though raised from 45, this benefit still leaves thousands of military engineers, lawyers, doctors, technicians and mechanics retiring two decades before their professional peers who do similar work in civilian outfits around the block from them.
This is the kind of a perk whose financial exorbitance and social injustice can be explained by no public relations stint, least of all the kind of bullying to which the military has now resorted in its thinly veiled effort to unleash the pubic on the Treasury.
Which of course raises the question: Where in all this is the man whose job it is to reconcile the generals’ demands and the politicians’ constraints? MOSHE YA’ALON is, in many ways, his predecessor’s complete opposite.
Ehud Barak was a famously obnoxious boss whose aides seldom survived in his presence for more than several months, an arrogant manager who seldom listened to others, and a disingenuous politician who preached social compassion while being in effect a hedonist who shed his kibbutznik’s shack for a skyscraper’s luxurious multiplex.
Ya’alon, by contrast, is a soft-spoken man who listens patiently to advisers, is loyal to his staffers, and shed the urban setting of proletarian Kiryat Haim outside Haifa, where he was raised, for the Arava desert north of Eilat, where he joined Kibbutz Grofit as a farmer.
Yet like Barak, Ya’alon is a career general now facing the test so many generals before him failed, namely to assume a civilian mindset. In his first four years in politics, as strategic affairs minister, there was little opportunity for this challenge to be tested. Now there is, and the results so far indicate that Ya’alon has yet to mentally emerge from his uniform.
Ya’alon is not unique in this. All of the other nine generals who have so far served as defense ministers failed this test; all except one – Yitzhak Rabin.
Though back when he became chief of general staff in 1963 Rabin demanded to expand the army, a request that then-defense minister Levi Eshkol heeded, when Rabin reached that position himself in 1984 he reversed course.
Having previously served as prime minister, opposition leader and ambassador to Washington, Rabin arrived at Ya’alon’s current position politically seasoned. That is why he saw the broader picture, which was the economy’s need of a deep cut in defense spending. This, according to his biographer Yossi Goldstein, Rabin saw even before the following year’s economic stabilization plan, in which he slashed defense spending by one-fifth. It was a brave move whose contribution to Israel’s pressing civilian needs at the time was crucial.
Ya’alon’s process of civilian seasoning seems for now incomplete, if it has begun at all. Having previously been diplomatically irresponsible, as when he attacked US Secretary of State John Kerry, Ya’alon now appears politically reckless. The budgetary battle he has engaged is seen as his idea, as Lt.-Gen. Gantz, both in terms of interests and character, would not decide on his own volition to unleash the generals on the politicians.
It is a choice Ya’alon may live to regret.
israel’s civilian needs today are fortunately not nearly as dramatic as they were when Rabin slashed defense spending in order to help defeat hyperinflation, and lead the Israeli economy from its founders’ socialism to their grandchildren’s capitalism.
However, with all neighboring armies now busy one way or another with other problems, and with voters eager to cut costs of housing, tuition, and healthcare, there will be no convincing the public that this is a time to expand military spending. It is this political context that Lapid understands, Ya’alon refuses to accept, and Netanyahu cannot afford to ignore.
That is why Netanyahu on Wednesday summoned Lapid and Ya’alon for an emergency meeting in which he reportedly admonished the two to debate, while promising to personally decide this dispute.
Netanyahu, incidentally, arrives in this battlefield in dire need to display leadership. The presidential election saga, whereby he grudgingly backed a candidate he didn’t want in an election he failed to postpone for an office he failed to abolish, has left the prime minister ridiculed and bruised.
In one of the strongest scenes on TV drama The Sopranos, a wounded Tony Soprano, eager to restore his authority after having been shot and hospitalized, picks a fight with an innocent underling, beating him up while the boss’s dozens of captains and soldiers watch silently, Netanyahu is not a crime boss, but he too might want to pick a fight now, and win it just to show that eulogizing him would be premature.
Ya’alon has this week supplied such a fight’s potential victim.
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