The treasury recently agreed to allocate NIS 290 million to ultra-Orthodox religious and educational institutions in exchange for the support of the sector's political parties for the 2007 Economic Arrangements bill.

The Economic Arrangements bill is a collection of treasury proposals that accompanies the budget every year. It is designed to bypass the regular legislative process, once it is passed, in order to implement reforms and other changes that the Finance Ministry wishes to push through rapidly.

The deal was struck between the treasury and the chairman of the Knesset Finance Committee, MK Ya'akov Litzman (United Torah Judaism). The deal requires Litzman, in a marathon of Finance Committee meetings beginning Sunday, to gain the approval to pass the bill within ten days.

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The Finance Ministry denies having made such a deal, saying that while Litzman had indeed discussed the budget with the treasury, no agreements were reached.

Litzman has met recently with Finance Minister Abraham Hirchson and presented the minister with a list of budget requests, in exchange for which he would facilitate the quick passage of the bill in the Finance Committee.

The deal was finalized when the treasury realized that without Litzman's help, the Finance Committee would not approve the bill by the end of the year.

The Finance Committee has not yet begun to discuss the Economic Arrangements bill, despite the fact that the Knesset House Committee passed the 40 clauses of the bill that must be approved to the Finance Committee ten days ago.

In a telephone conversation Thursday, Hirchson discussed the budget with the chairman of the Labor faction in parliament, MK Yoram Marziano. At present, the Labor Party does not support the bill.

Labor requested NIS 2 billion to be allocated to social welfare institutions in exchange for their support of the bill, but the treasury refused, claiming it could not spare such an amount. If the treasury is unable to resolve the dispute with Labor and win its support, it will have no choice but to turn to the National Religious Party, or another opposition party, to garner a majority for the budget.

In 2006, in exchange for not opposing the budget, the National Religious Party received NIS 122 million in funding for Zionist religious institutions. The United Torah Judaism (then in opposition) received NIS 290 million for ultra-Orthodox institutions, and Yisrael Beiteinu (also in opposition at the time) received NIS 180 million for its causes.

In recent weeks, coalition whip Avigdor Yitzhaki (Kadima) has been pushing for Litzman's dismissal and the appointment of a member of Yisrael Beiteinu in his place as chairman of the Finance Committee. However, experts believe that only Litzman would be able to steer the passage of the Economic Arrangements bill within the time left.