Facing a deepening US recession, the umbrella organization of Jewish communities throughout North America is considering a budget proposal that would bolster domestic operations at the expense of programs in Israel and throughout the world. According to a memo sent to employees, the United Jewish Communities expects to shrink its overall budget for 2009 by 18 percent - from $37 million to about $30m. - through a combination of layoffs and program cuts. But officials at the Jewish Agency for Israel and the Joint Distribution Committee - the two main bodies responsible for channeling American Jewish charitable donations to overseas projects - told The Jerusalem Post the UJC leadership, under pressure from individual federations to cut dues fees, is recommending that another $7.5m. budgeted for overseas projects be made discretionary. Under that plan, which will be considered at a board meeting scheduled for Monday, federations would be required to pay just $22.5m. in dues overall. That could mean sharp cuts at both JAFI and JDC if federations decide not to cough up the extra dollars. "How will federations explain to donors that funds allocated for overseas needs - such as feeding the hungry or aliya to Israel - are now used to balance the budget of the National Agency?" asked JDC heads Irving Smokler and Steven Schwager in a letter sent Thursday to the UJC. "We also realize that the invasion of overseas funds for organizational purposes may not occur should the shortfall be 'made whole' by federations. However, balancing an administrative budget with dollars for needy overseas Jews seems to us both wrong and inappropriate," the letter went on. Schwager told the Post in a statement Friday there had been "no substantive response from UJC on the issues we raised." JAFI chairman Richard Pearlstone told the Post that he had also sent a letter to the UJC but had not received any formal response. He declined to comment on the specifics of the $7.5m. "off-the-top" proposal because he had not yet seen it in writing - but acknowledged that it appeared to be a unilateral move by the UJC to shield itself in a tough fundraising climate without regard for either JAFI or the JDC. "It would appear that's what it is," Pearlstone told the Post. The relationship between the three organizations has already been strained by a January decision on the part of UJC - created a decade ago largely to coordinate North American fundraising for JAFI and the JDC - to consider breaking their exclusive funding deal in order to begin giving money to startup philanthropic organizations in Israel and around the world. A final decision on that plan has been deferred until this summer. UJC spokesman Joe Berkofsky told the Post he would not comment on the specifics of any budget proposals ahead of Monday's meeting, but he said that the organization was struggling to address the needs of individual federations whose own fundraising has been squeezed. Donors are giving less, and many regular donors have not yet renewed their pledges, Berkofsky said. Federations have raised about $451.5m. so far this year, down from $468.3m. UJC, which held a national conference call last week with the company that pioneered Barack Obama's grassroots Internet fundraising strategy, is pushing to help individual federations make up the difference with requests focused on helping the needy in the US rather than relying on traditional appeals for money to assist Jews in Israel or abroad. A viral video produced for Pessah reminds donors that 11 million Americans are out of work and asks donors for money to help Jewish families in the US stave off foreclosure, heat their homes, and buy food - with helping those around the world appearing almost as an afterthought.