The aftershock from last week's publication of the Treasury's 2009 budget proposal is still reverberating throughout the haredi community. With the cabinet slated to vote on the proposal on Sunday, fiscal issues have been pushed to center stage in the haredi media. Haredi newspapers lamented the proposed cut of NIS 200 million from the NIS 400m. yeshiva budget, which pays stipends to post-high school-age men who study in yeshivot. In its heyday, before Shinui joined Ariel Sharon's government in 2003, this budget was NIS 1 billion. This weekend's Yom Leyom, Shas's mouthpiece, led with a story about the party's failure to find a sympathetic ear among Kadima's leading politicians for the haredi community's special budget needs. The paper also attacked the Treasury's proposal to cut child allotments from NIS152 a month per child to NIS135, at a time when Shas's main political demand from any future prime minister is beefed-up child allotments. Shas is demanding an NIS 1b. addition, while the Treasury is hoping to cut NIS 500m. and reallocate about NIS 200m. of that to programs that help children, such as the hot lunch and extended school-day programs. In other haredi papers, the trend was similar. The front-page headline of the weekly Bakehila was "A Broken Promise," which referred to Transportation Minister Shaul Mofaz's about-face on child allotments. During a visit at Shas mentor Rabbi Ovadia Yosef's residence in Jerusalem's Har Nof neighborhood to receive a blessing, Mofaz reportedly promised to "look into" Shas's demands to increase child allotments. But just a few days later, at a Kadima primary rally, Mofaz publicly announced that he would not support a hike. Shas officials discounted Mofaz's backtracking, and claimed that if he is elected as Kadima's choice for prime minister, he would be willing to cut a deal with Shas on child allotments to prevent early elections. Sources in Shas said that Mofaz's comments were designed to garner him support among Kadima's anti-haredi constituents. In contrast, Shas is convinced that if Foreign Minister Tzipi Livni wins the Kadima race, she and her chosen finance minister, Ronnie Bar-On, would sooner go to early elections than be seen caving in to haredi budget demands. As Yossi Elituv, a senior correspondent for the haredi weekly Mishpaha, put it, "Bar-On and Livni represent that haredi-hating constituency within Kadima which is really a political reincarnation of Shinui. Those two would like to transform Israel into a state populated with Hebrew-speaking goyim. Bar-On in particular has a basic aversion to anything that smacks of God or yiddishkeit. They represent a very Ashkenazi, very secular segment of the society that lives in a few square kilometers north of Tel Aviv." IN PARALLEL, Shas is intractable in its demand for an increase in child allotments. Shas chairman Eli Yishai has stated on numerous occasions that his party would refuse to form a government coalition without a significant hike. As a result, Shas sees a Mofaz victory in Kadima's primaries as the only way of averting early elections. Shas has already announced that its ministers will vote against the budget in the cabinet on Sunday. Earlier in the week, Labor made a similar announcement. But Shas sources are concerned about rumors that Labor chairman Ehud Barak has struck a deal with Prime Minister Ehud Olmert that would allow Labor to support the budget. The cuts to the allotments initiated by finance ministers Silvan Shalom and Binyamin Netanyahu in 2002 and 2003 sharply reduced the incomes of households with many children. Coupled with the deep cuts to the yeshiva budget, this has left the haredi community hurting. SINCE 1959, the country has been offering child allotments in various forms as a means of encouraging fertility and supporting large families. At first it was paid only to families with four or more children. Between 1970 and 1996, the National Insurance Institute paid an augmented child allotment to families with at least one IDF or security service veteran. This practice effectively discriminated against Arab and haredi families. In the 1980s and '90s various attempts were made to either tax the allotments as income or pay exclusively to low-income families. However, left-leaning economists and social activists argued that this stigmatized the poor and dampened the incentive to work. At the end of 2000, under haredi political pressure, child allotments underwent a major upgrade. Known as the Halpert Law, after MK Shmuel Halpert (United Torah Judaism), the amendment granted families with five or more children significantly higher allotments. A family with eight children younger than 18, for instance, received NIS 3,799 a month before the Halpert Law, and NIS 4,827 after it was passed. Today, the same family receives about NIS 1,800, assuming six of the children were born before July 2003, which entitles it to slightly higher allowances for them than the NIS 152 a month per child for those born after that date. In part as a result of the deep cuts in child allotments, and in part due to the cuts to yeshiva student's stipends, a family with eight or more children is four times more likely to be living under the poverty line than the average family, according to a Bank of Israel report published in April. According to the same report, 8 percent of the population is haredi, while 18% of those living under the poverty line are haredi. The cuts in allotments also have had an impact on fertility rates, according to the Bank of Israel. The average number of children in a haredi family has fallen from 4.3 in 2001 to 4.1 in 2006. The average number of children younger than two in haredi families has fallen 18% from 0.45 in 2001 to 0.37 in 2006. In Betar Illit and Modi'in Illit, a 10% drop in fertility rates has been reported during the same period. But there is another major factor explaining the reduction in birth rates: More haredi women are joining the workforce. Women's pursuit of jobs to help make up for the lost child benefits has resulted in postponing pregnancies. Although more haredi women than men work, there has nevertheless been a marked rise in employment rates among both men and women. In 2001, 23.2% of haredi men participated in the labor market; in 2006, 27.7% did. For women the rise was even more dramatic. In 2001, 42.1% participated in the job market, compared to 49.4% in 2006. According to Chaim Guggenheim, business development manager at Manpower Bereshit, a local subsidiary of the international job placement firm that specializes in haredim, a large proportion of haredi men get paid "under the table." "From haredi sources I estimate that in addition to about 30% of haredi men who are legitimate, registered workers, there are another 30% who are working in the black market as porters, shopkeepers, teachers and all sorts of odd jobs, without social benefits or job security of any kind." OFFICIALS IN Shas are aware that the cut in child benefits has pushed more haredim into the job market. And this, they admit, is a positive development - as long as those who want to pursue serious Torah scholarship are given the means to do so. However, they point out that many haredim who have joined the labor market are still living in poverty because they lack the training and skills needed to find a higher-paying job. Child allotments, they say, should therefore be partially returned to help haredi families make a smoother transition. Our demand is modest," said Yishai's spokesman, Ro'i Lachmanovitch. "We want an NIS 30 increase per child per month. This alone would lift half a million children above the poverty line, and it would only cost about NIS 1 billion." Raviv Sobol, a senior Treasury official, rejected Lachmanovitch's claim. "We believe that the best way to help children is not by providing every single family, both rich and poor, with allotments," he said. "Who says the family head will choose to use the allotments for his or her children's benefit? Better to earmark the money for programs that specifically target children, like hot lunch programs in schools."