The Bottom Line / A lame duck prime minister versus the treasury
At the Wednesday night meeting between Prime Minister Ehud Olmert and the treasury, it turned out that despite the claims he made in Washington he doesn't have even a beginning of an alternative plan for a pension-savings safety net.
So what does he have? First, a desire to prove that despite his political and legal troubles, he is still prime minister in every way, whether in economics or peace negotiations with the Syrians and Palestinians. Second, he really wants to expand the treasury's NIS 10 billion plan toward NIS 20 billion, and he doesn't give a damn what that does to the budgets from 2009 to 2015.
Olmert ignored the treasury's explanations at the meeting, when they discussed how no other country has spread such a pension safety net. But he ordered the treasury and Bank of Israel to improve their plan.
The treasury is very uncomfortable with a lame-duck prime minister, especially because the attorney general has decided to indict him for fraud. Olmert has tried to impose long-term costs on the state budget without any discussions or decisions by the cabinet or Knesset. That is what happened just a short time ago when Olmert forced a decision on the treasury to increase spending for higher education; now he wants to do the same with the safety net.
The Finance Ministry has an additional problem, this one called Finance Minister Roni Bar-On. Olmert and Bar-On were friends for many years and Bar-On owes Olmert his job. In every case of dispute between the ministry and Olmert, Bar-On always took the prime minister's side. And that is what happened on Wednesday. The double-voting affair concerning Bar-On, which only came out recently, has not helped either.
Treasury officials say the quest for popularity before the Kadima primary has decreased the support they used to receive from Bar-On. It is hard to come up with a complex economic emergency plan, especially during an election period, when you are not sure your minister will support you 100%.