The Shekel Drops Katz's Paw

Haim Katz, chair of the Knesset Labor, Welfare and Health Committee, made Finance Minister Yuval Steinitz a laughingstock - he sponsored a bill to keep the retirement age at 62.

It's been a while since I've heard the finance minister get that angry. He railed at the Knesset members, at Haim Katz, at Dalia Itzik, and at everybody who foiled his attempt to raise the retirement age for women from 62 to 64. "It's the worst mistake we've made in the two years spent handling the global crisis," Yuval Steinitz fumed.

I asked him how he could be weaker than Katz, who chairs the Knesset Labor, Welfare and Health Committee and who made Steinitz a laughingstock - Katz who sponsored the anti-bill, keeping the retirement age at 62.

Haim Katz. Ofer Vaknin

Usually he has more clout than Katz, Steinitz answered. But this time, even though he had the prime minister's backing and even though Benjamin Netanyahu even talked with Katz, a broad coalition against Steinitz and for Katz formed in parliament, including all the female MKs and even Avigdor Lieberman. Populism won the day.

There was not one righteous man to be found in the hallowed halls of parliament. Seventy-seven MKs voted in favor of Katz's bill and zero voted against. Everybody had a beady eye cocked on women's organizations and the women's vote. Polls show that 70% of the people oppose raising the retirement age for women. Why make enemies?

So, I pressed Steinitz, why hadn't he voted against Katz's bill, making it 76 to 1? Coalition discipline, Steinitz explained. He didn't vote yea, he voted "present," which is a protest, he said.

I didn't buy that feeble explanation. The finance minister should vote according to one criterion: the good of the economy. If a horrible mistake was being made, as Steinitz said, then he should have voted against it. The fate of the economy is more important than a few seats here or there for Likud.

In any case, Steinitz should have prevented Katz's bill from reaching a vote at all. He's the finance minister. He can't be weaker than Katz.

Nor did Steinitz speak out in the days before Katz's bill arose. He stayed mum. Why, I asked him. He said he'd been working behind the scenes to reach a compromise with Katz that would defer raising the retirement age for women by a year or two, for instance. But that explanation is just as unacceptable, especially as Steinitz must have realized pretty quick that Katz wasn't about to compromise on anything. He wanted to win, period.

It's not the economy, stupid

Katz's cronies say that in the days before the vote, Netanyahu pressed Katz to accept a compromise. Lest we forget, raising the retirement age for women is Netanyahu's idea, one he's been touting since 2004. Katz refused, on the grounds that Likud would lose seats in the next election. In other words, he wasn't fighting for some principle or ideal. It's cynical politics. It's about seats, not the economy, stupid.

Steinitz added that after the vote, he demanded that Speaker Reuven Rivlin give him the podium. "It's a victory for populism over common sense," he thundered. "I'm not part of this populism party here in the Knesset. This isn't grounds for celebration. It's a disgrace."

How could it be that Katz couldn't care less what Steinitz and Netanyahu think?

Because Katz has a well-disciplined army of 12,000 voters at the primaries, that's how - workers at Israel Aerospace Industries and their families. They get bused to the primaries and vote how Katz tells them to vote. That's the kind of power that makes or breaks candidates. So nobody gets in dutch with Katz. Not even the finance minister or prime minister.

It's Netanyahu's fault that things have reached this sorry pass. He's Likud chairman and prime minister, too, yet he quakes before Katz. Bibi wants to be loved, not a fighter. That's why he didn't attend the vote even though he was in the building. What does he care about the budget, economic stability or social security? What counts is seats!

Over at the Finance Ministry's budget department, they're in shock at the defeat. Once upon a time it would have been unthinkable for the Knesset to simply scorn the budget department.

But the department isn't giving up and skulking off into the night. They mean to fix things, and fast, because the real topic at stake is the actuarial stability of old pension funds (which are closed to new members but still have to meet their liabilities ). It's a matter of the budget of the State of Israel. Raising women's retirement age from 62 to 64 would have saved enormous sums.

Also, two extra years of work means more productivity and more tax income. Also, if women work more years, they'll save more for retirement and the state can save even more money on income supplements.

As things are, women retire at 62 and get pension payments for 21 years on average - more than anywhere in the West. And it can't continue. It puts Israel's social security in jeopardy. (Men retire at 67 and get 12 years of pension payments. )

Believe me, the budget department is waiting in the wings. Its time will come when the 2013 budget takes shape and it turns out that NIS 6 billion needs to be cut. It will also turn out that raising the retirement age two years will save the state NIS 1.5 billion. Want welfare and health care? Raise the retirement age for women.

Or the budget department can wait for a new government with brand-new MKs, dewy-eyed newbies who don't know the ropes and tremble before the great and mighty finance minister.