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The government's proposal to pass a two-year budget for 2011 and 2012 passed the Knesset hurdle yesterday with a big majority. The bill passed its second and third readings by a vote of 63 to 32. Three Labor MKs - Eitan Cabel, Amir Peretz and Daniel Ben Simon - were absent, and Shelly Yachimovich voted with the opposition.

"All over the world, they're writing how the two-year budget helped Israel deal with the global crisis," said Finance Minister Yuval Steinitz. He added that he would have expected opposition MKs to admit they were wrong in coming out against it. He called opposition to the measure "political."

Yachimovich, whose Labor Party is part of the governing coalition, argued that setting a rigid two-year budget in changing economic conditions is a "major economic and social mistake."

In a debate lasting more than 12 hours, well into the night, opposition MKs led by Kadima rose one after another to attack the move by Prime Minister Benjamin Netanyahu and Steinitz to get around the law that requires national budgets to be set for a single year.

According to the Basic Law on the State Economy, "The Budget shall be for one year and shall set out the expected and planned expenditure of the Government." To circumvent that obstacle, Netanyahu and Steinitz simply used a temporary order.

At 6:30 A.M., Kadima MKs, in consultation with the heads of other opposition factions, decided to start the vote, dragging Netanyahu and his cabinet out of bed.

First to speak was former finance minister Roni Bar-On (Kadima ). "There is a heavy-handed coalition here that doesn't care about the law," he said. "During their wild foray, in which they trample everything, they are also trampling this principle."

Bar-On said the law on the budget pertains to the rules of the game and the system of governance. "If it is to be changed, it is to be done for the next [Knesset] term, and it should not take immediate effect," he said. "That is an accepted norm both in the West and in Israel."

Nachman Shai (Kadima ) said a two-year budget is silly and "damaging to the economy and the political culture of the State of Israel."

"The two-year budget was designed to give this government two more years of peace and quiet at the expense of the public purse," Shai said. "The most bloated government in the history of the state has been unmasked. This is a government that has placed political survival above all else, which is why it prefers a two-year budget."

Yachimovich said "Israel has chosen to be the world's guinea pig in this inappropriate adventure, and it is not for nothing that no other country is following suit. It is a perpetuation of the dictatorship of the Finance Ministry's bureaucrats and makes the government and the Knesset irrelevant."