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Perhaps there was a strategic process here after all: transforming Amir Peretz into a senior partner, signing him on first to create a majority of 61 MKs (Kadima, Labor, Pensioners and United Torah Judaism), and then, from a position of power, bringing down to nearly nothing the price that needs to be paid for Shas and Yisrael Beiteinu's entry into the government.

Peretz was selected to be the strategic partner, because he is similar to Ehud Olmert from a political perspective. He is prepared for convergence and for the removal of settlements in the West Bank - a process without which Olmert will be considered a failure. But the price paid for the alliance is very high, almost too high.

The cabinet to be established will be expensive and bloated with 26 ministers, six of them without portfolios, whose main task will be to waste the taxpayers' money. The work of the Knesset - about a quarter of whose members will be part of the executive branch - will sustain damage. Who will stay there? The junior MKs from the back benches and the new ones who have arrived only now - and they will be the legislators.

This huge cabinet also generates an atmosphere of "I have" - that everything has been breached, the coffers are full, come and make demands because the landlord has gone mad. The cabinet meetings will become a farce, since it is impossible to conduct a serious discussion with 26 people. A small political-security cabinet will naturally arise, and the broad cabinet will become an absurd rubber stamp.

But since the alliance with Labor already has been made and the heavy price already has been paid, it is appropriate to at least stop here and prevent further damage. The first subject that needs to be dealt with is the budget. Benjamin Netanyahu introduced in 2003 a new reform that limited government expenses. He initiated a law limiting the annual budget increase to 1 percent. The goal was to minimize the size of the debt and burden of interest and allow for a decrease of interest - steps that encourage growth and lower unemployment. It now has become clear that Olmert plans to cave in and allow an increase of 1.7 percent in the 2007 budget, which means an additional NIS 1.6 billion expense a year. Ariel Sharon also wanted that, but Netanyahu insisted on the limitations and refused to agree. In contrast, Olmert caved in to Peretz easily - and that is his first big mistake.

The second important issue is the minimum wage. In this instance, it appears that there is a chance for a reasonable agreement that will raise the minimum wage in a gradual and responsible way. It depends on Olmert's stamina. An increase is the right thing in an effort to minimize gaps and encourage those who work rather than those who attempt to live at the public's expense without getting a job.

The third issue relates to the demands of the Pensioners Party. They want to improve old-age allotments - including those of retirees who have additional income, like from a nice pension. That is unnecessary. We must improve the situation of the elderly who have no additional income, but the budget is not a bottomless pit.

However, all these issues shrink in comparison to child allotments. This is Olmert's big test: Will he cave in to Shas and increase the allotments? At the beginning, Shas tried to go back to the happy times of the Halpert Law, in which parents were alloted NIS 856 a month for the fifth child and beyond, while the secular suckers received NIS 171 for each of their two children. Shas then slightly moderated its demands, and today it wants to return to the level in 2005 and completely halt the process of equalizing allotments - that is, to return to a situation in which parents receive NIS 400 for the fifth child and beyond, but only NIS 148 for the first or second.

This is a scandal. Shas wants to restore discriminatory allotments. Aside from the budgetary problem, a return to bloated child allotments will encourage poverty. The allotments will once again encourage childbirth among the poorest families, which have many children, particularly among the ultra-Orthodox, Arabs and Bedouin.

It will once again become worthwhile to have a bigger family and live off the allotments without working. Increasing the allotments will increase poverty, just as it was the case between 1983 and 2003. But Shas is not afraid of poverty. On the contrary, it's the best horse to ride to the polls.

Therefore, if Olmert indeed has carried out a strategic process with Peretz and paid him an exaggerated price, the interim prime minister must now turn off the faucet and refuse to allow the corrosion of the greatest social accomplishment of Sharon's government: the equalization of child allotments in a graduated process slated to end in 2009. And if Shas insists, Olmert should not let it join the government.

Because if he does give in to them, it will be clear that Olmert has no strategy, that he is a leader who is easily pressured, who has no backbone or stamina. And if that's the case, then how can we rely on him in crucial negotiations with the Palestinians?