Israel Set to Settle Next Defense Budget, Lapid Proposing Cuts of Up to NIS 4 Billion

Lapid is expected to ask for a NIS 4 billion cut in the defense budget, while defense officials are expected to ask for NIS 2 billion to NIS 3 billion in additional funding.

Moti Bassok
Moti Bassok
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Moti Bassok
Moti Bassok

Finance Minister Yair Lapid, Defense Minister Moshe Ya’alon and Prime Minister Benjamin Netanyahu will discuss Israel's defense budget on Sunday, with Netanyahu expected to make a decision on the issue. The cabinet will begin discussing the budget and the accompanying Economic Arrangements Law on Monday and vote on the matter Tuesday morning.

At Sunday's meeting, Lapid is expected to ask for a NIS 4 billion cut in the defense budget, while defense officials are expected to ask for NIS 2 billion to NIS 3 billion in additional funding, as well as funding commitments for beyond 2014 so they can carry out their five-year defense plan.

Netanyahu and Lapid are the leaders of the two largest parties in the Knesset, Likud and Yesh Atid. They share similar views on socioeconomic issues, but though they are cooperating for now, they each could be hoping for the other’s downfall. Lapid has made clear he wants to be Israel’s next prime minister.

Before his trip to China last week, Netanyahu made sure not to wade into the tussle between the finance and defense ministries over the size of the defense budget. In Beijing and Shanghai, where Netanyahu was accompanied by a throng of economics reporters, he tried to avoid discussing Israel’s domestic economic debate. On his return to Israel Friday, Netanyahu was quick to phone Lapid to express support for his drafts of the budget and the proposed Economic Arrangements Bill.

Unlike during previous budget debates, ministers have kept silent. As of Saturday, Lapid had the support of just nine of the 22 cabinet members − five from his Yesh Atid party, three from Habayit Hayehudi, and Likud’s Yisrael Katz, the transportation minister. Lapid has assuaged Katz’s concerns about cuts to spending on expanding the railway system.

Lapid dominated the Friday night news broadcasts on all three major channels, 1, 2 and 10. Although one of Netanyahu’s strongpoints has always been his ability to communicate directly to the public on television, he’s now up against a finance minister who is a former anchorman.

And on Wednesday evening, while Netanyahu was still in China, Lapid was front and center on the news − he and Histadrut labor federation chief Ofer Eini announced an understanding.

Sunday’s meeting between Netanyahu, Ya’alon and Lapid will also be attended by senior finance and defense ministry officials, as well as top officers in the Israel Defense Forces, including Chief of Staff Benny Gantz. Lapid reportedly hopes to come to an advance agreement with Ya’alon on the defense budget, as he has done on labor issues with Eini.

Lapid has met several times with Ya’alon on the matter but hasn’t had an easy time negotiating with defense officials. The gap in the two ministries’ positions has appeared unbridgeable, requiring Netanyahu’s intervention.

Netanyahu has not commented publicly on the issue and apparently hasn’t shown his hand in private meetings either. But based on experience, Lapid could wind up disappointed because Netanyahu has typically sided with the defense establishment on such matters.

Over the weekend, Finance Ministry officials warned that if about NIS 4 billion isn’t slashed from the defense budget, the government will have to make further cuts to education, health, welfare and infrastructure. The Finance Ministry notes that it’s constrained by the planned deficit ceiling of 4.65 percent of gross domestic product for 2013 and 3 percent for 2014.

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