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The Finance Ministry suffered an embarrassing defeat yesterday: The Knesset House Committee decided to send the section of the Economic Arrangements Law freezing National Insurance Institute (NII) allowances to the Labor, and Welfare Committee. The treasury wanted the section to go to the Finance Committee.

The decision is seen as the end to the attempt to freeze NII allowances starting January 1, 2008, as the committee is expected to bury the bill. The House Committee finished parceling out the parts of the Arrangements Law between committees yesterday.

Another defeat for the treasury came in a decision by the House Committee to prevent shrinking the payments to parties for municipal elections. The Finance Ministry had wanted to reduce the sum from NIS 61 to NIS 34 per voter. The committee refused the treasury's demands to vote on the bill by the end of the year. This means, for all practical purposes, the death of the proposal, as MKs are unwilling to cut state payments to their parties on the eve of the 2008 municipal elections.