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Sources in the Financial Ministry said Thursday morning that they expected "radical" changes in the 2006 state budget, which passed in a first reading by a narrow margin, before it was presented for the second and third reading.
The expected changes include stopping the cutbacks to social security, an expansion to the health basket, and an increase to the current minimum wage, Army Radio reported.
On Wednesday, despite a last-minute protest by three "rebel" Labor MKs, the Knesset approved the first reading of the budget in a vote of 62-47. The coalition needed at least 61 MKs to vote for the budget to get it sent to the Knesset Finance Committee, where changes will be made before it is sent back to the Knesset plenum for second and third readings.
Earlier in the day, Prime Minister Ehud Olmert held talks with Labor chairman Amir Peretz and Gil Pensioners Party leader Rafi Eitan and demanded they get their MKs to vote for the budget.
[For a Jerusalem Online video of events click here]
The hours leading up to the vote were dramatic ones for the Labor Party, as Peretz called a last-minute faction meeting to convince wavering MKs to vote the party line.
However, Peretz's pleas were not enough to prevent MKs Yoram Marciano, Shelly Yacimovich and Shalom Simhon from walking out before the vote.
"In the end I just had to vote my conscious, and I could not, just could not, bring myself to vote for a budget created by Bibi [Likud chairman Binyamin Netanyahu]," said Yacimovich. "I'm afraid there will be repercussions for me in the party."
A fourth Labor Party MK, Ami Ayalon, was absent from the vote for personal reasons.
Labor MK Nadia Hilu vacillated until the final moment before casting her vote in favor of the budget.
Hilu sat in the Knesset cafeteria listening to the plenum bells sound a five-minute warning as she considered what to do. At the last moment, she ran down to the Knesset floor and voted in favor.
"I kept going over it in my head," said Hilu. "In the end, Peretz promised me a seat on the special Knesset committee that will deliberate over the budget... I decided that if I could sit on that committee I could make sure the final budget has the necessary changes."
The coalition MKs who voted against the budget will be banned from speaking in the plenum or introducing motions, a traditional punishment for legislators who violate party discipline.
Earlier, Gil MK Moshe Sharoni had threatened to abstain, but he was convinced by fellow party members.
"A coalition cooperates in unison," said coalition chairman Avigdor Yitzhaki (Kadima). "These MKs do not understand what it means to be part of the coalition.
Before the vote, representatives of all the parties discussed the budget.
Netanyahu denied claims that the current draft was identical to the one he prepared when he was finance minister.
"This is clearly not my budget... there have been changes made that are for the worse and it does not reflect the new economy of 2006," said Netanyahu. "There is no way that today I would vote for this sort of budget."
For most legislators, however, the budget that Netanyahu voted against Wednesday was clearly one he had created. The irony did not escape the MKs, who could not resist heckling one other during the vote.
As Netanyahu voiced his "No" vote, Kadima MKs goaded him for voting against himself.
When Peretz voted "Yes," opposition MKs led by Likud MK Gideon Sa'ar could not help calling out, "Peretz votes for a Bibi budget, who would have thought we would see the day?"
Peretz yelled back, "If Bibi votes against the budget, I vote for it. It makes perfect sense."
Before the vote, Finance Minister Avraham Hirchson said that significant changes would be made before it was returned for a second and third vote.
The Finance Committee has already begun reviewing the document, but its deliberations are being delayed by discussions over choosing a new chair for the panel.
In other news, the government faces a no-confidence vote on Monday over the increase in bread prices.