Budget deliberations off to heated start

PM accuses Barak of blocking defense discussions; Finance Minister Bar-On hits back at criticism.

Bar-On cabinet 248.88 (photo credit: Ariel Jerozolimski [file])
Bar-On cabinet 248.88
(photo credit: Ariel Jerozolimski [file])
Prime Minister Ehud Olmert lashed out at Defense Minister Ehud Barak on Sunday, accusing him of blocking any meaningful discussion on military matters. "This government hasn't been able to hold any serious debate on defense issues because you won't let it," Olmert told Barak. "No one even knows what the Defense Ministry's multi-year plan is, because you do not want them to know." When the plan's initials are mentioned, he said, people think it's an acronym for Rosh Hashana, because the letters are similar. The Labor party said in response that "Olmert won't be the one to teach us how to behave." The prime minister's comments came at the end of a four-hour initial cabinet discussion on the 2009 state budget, in which ministers were asked to scale back their fiscal requests by a total of NIS 8.5 billion. The Defense Ministry is in danger of losing the most and could be asked to trim as much as NIS 2.1b. from its budget request for next year. Earlier in the discussion, Finance Minister Ronnie Bar-On presented a NIS 319b. draft state budget that includes an operational budget of 236b. and represents an increase of 1.7 percent from 2008. Ministers from Shas, Labor and the Gil Pensioners Party called on Olmert and Bar-On to allow for a larger budgetary increase. Such a hike would be dangerous, Bar-On said. He hit back at scathing criticism of his proposals and warned against using fiscal policy for political gain. "We have made a great effort in recent months to isolate the economy from the political game," he told the cabinet. "Don't turn our economic policies into a political battering ram between factions, parties and party leaders. It is a dangerous game that we will all regret," he warned the ministers. "It was difficult to build a stable Israeli economy, but it would be very easy to shatter it." Earlier in the cabinet meeting, Olmert urged ministers to approve the budget. "I will not accept factional behavior when it comes to the budget. It is unacceptable. I will not have it," he said. "Ministers have a collective responsibility when it comes to the state budget. I will do everything in my power to have it passed. This government needs to continue existing despite political processes." He continued, "I intend to use all my powers to bring about the budget's approval. In this matter I am a full partner with the finance minister. A government that is unable to pass a budget in the time frame that it set for itself is proclaiming that it is unable to function, with all the consequences implied by this. I will not allow this to happen. "I intend to discharge the full responsibilities of my office every day that I hold it, and this, of course, includes the budget and its passage," the prime minister said. "Don't test me," he warned. "We [the government] are going to make a decision on the budget." The prime minister said that in recent years, the government had given top priority to education, social welfare and defense. He cited the approval of the Dorner Commission's report that led to an increase in stipends for Holocaust survivors as an example. Olmert said it was important that the ministers approve the budget in a timely fashion. "We expect the coming year to see recessionary processes in the world economy as well as a rise in inflation that could adversely affect the Israeli economy," he said. Still, he added that the expectation for 2008 "is that it will end with significant growth for the Israeli economy, higher than that of any other Western economy. "This is the result of well-balanced fiscal policy and monetary discipline, instituted at times under very difficult circumstances by the Ministry of Finance, with the backing of the government." Both Barak and Public Security Minister Avi Dichter spoke out against the budget proposal. "The State of Israel loses NIS 13b. every year from crime, and the police and the Defense Ministry are not receiving the appropriate budget for this," Dichter said. Barak said more money was needed to provide adequate defense. But Olmert took issue with both men. He told Dichter the police would have more money to fight crime if it had not spent so much time fighting political corruption. While that was important, it could not come at the expense of the personal safety of Israelis, Olmert said. It was not acceptable that a woman was gunned down on a Bat Yam beach recently while detectives sat 50 meters away, he said. Turning to Barak, the prime minister said he had transferred more money to the defense budget during his time in office than Barak had when the Labor Party leader had been prime minister and IDF chief of General Staff. In a further dig to Barak, he said "I want to tell you something cautiously Ehud, and I'm saying this out of a lack of desire to lock horns but if I had such plans for the coming months, I would." After the cabinet meeting, Shas chairman Eli Yishai spoke out against the draft budget and in particular against the way it was being presented. For the first time, instead of presenting a single draft budget, Bar-On has offered two alternative budgets. The first favors the Defense Ministry and would require it to scale back its budgetary requests by only NIS 900 million, while social welfare would have to make do with NIS 1.2b. less and local government would have to trim NIS 160m. from its requests. In the second option, the Defense Ministry would have to trim NIS 2.1b. from its budgetary requests, while social welfare would have to scale back only NIS 117m. and local government only 30m. After the meeting, Yishai told Army Radio that "choosing between defense and social welfare is like choosing between your firstborn and your second-born." Yishai added that Israel was in good economic condition compared to the rest of the world and that no cuts to budget requests should be made at all. Pensioners Minister Rafi Eitan said that if the elderly were adversely affected by the 2009 state budget, the Gil Pensioners Party would force an early national election. Bar-On plans to meet with ministers this week to lobby for the budget. The cabinet is set to further debate the budget at its meeting next Sunday.