Prime Minister Benjamin Netanyahu will need all of his leadership prowess to muster the needed support for an NIS 2 billion budget cut which, if approved, will slash deeply into the supplement funding promised to the Haredi parties under the coalition agreement. As the bill stands, the move will trim NIS 300 million off of additional funding promised for yeshivas, and an additional NIS 100 million promised to Shas, United Torah Judaism and Habayit Hayehudi.

Netanyahu's government coalition agreements made many budget-related promises to woo coalition members, including an additional NIS 750 million to finance yeshivas. The new proposal aims to erase NIS 750 million from various programs, or 20% of the funding negotiated under the various coalition agreements. The bill means that the ultra-Orthodox parties stand to lose a substantial portion of the funding they were able to wrangle through government coalition negotiations. Although the Finance Ministry's bill proposes to cut just half of the promised budgeting immediately and the balance in 2011, the fact is not likely to sweeten the bitter pill that the ultra-Orthodox parties will be asked to swallow. A difficult struggle for approval of the budget is in the offing for Netanyahu and Finance Minister Yuval Steinitz as a result.

Netanyahu seems likely to throw his entire weight behind efforts to persuade coalition members to agree to the budget cut. Objections of UTJ could be softened somewhat by the fact that the Health Ministry is one of the main beneficiaries of the budget. UTJ chairman Yaakov Litzman holds the deputy Health Minister position. Under the proposed plan, the ministry will receive additional budgeting of up to NIS 500 million to make preparations for a more serious outbreak of swine flu.

Netanyahu will also have to explain the necessity of reallocating NIS 1.5 billion to the defense budget to meet unpublicized needs and aims. Government sources hinted that the budgeting is required to meet very urgent defense needs for which coalition members will find it difficult to refuse budgeting.

Netanyahu has in fact altered the basic budget priorities for 2009- 2010 in favor of defense needs, but these cannot be financed without horizontal cuts to ministry budgets and coalition negotiated funding.