Budget / Strange Bedfellows

A lame-duck Ehud Olmert, on the verge of resignation and perhaps indictment, yesterday demonstrated that he remains the most skilled and experienced politician around.

Surrounded by his potential heirs in his own party and by Defense Minister Ehud Barak, the man who had jerked the rug from under his feet, Olmert managed, together with his finance minister Roni Bar-On, to pass the 2009 budget almost intact. They conducted this 16-hour battle in impossible conditions, against Labor, Shas, three maverick Kadima ministers, the Pensioners Party, the Histadrut chairman and the IDF's chief of staff. You read that correctly: People who were present at the meeting said that never had a chief of staff taken such an intensive part in budget debates, alongside his defense minister.

In Israeli politics of 2008, when a military attack on Iran and the fate of the Golan Heights both play a role in the ruling party's leadership primary, why should the state budget not be part of it as well?

Olmert and Bar-On wanted to convey to the economic sector and to the world statesmanship and responsibility in the government's twilight. But they had their own political axes to grind. Olmert against Barak and Bar-On against Shaul Mofaz, the arch rival of Bar-On's candidate for Kadima's leadership, Tzipi Livni.

They both won. Barak and Mofaz, who found themselves in one bed - strange bedfellows, although no stranger than Olmert and Livni - lost. Olmert will take pleasure in this victory long after he's out of a job. Bar-On, on the other hand, may have ensured himself another term as finance minister, if Livni heads the next cabinet. This is because the budget's approval will make it very difficult for Mofaz, if he wins the Kadima primary, to form an alternate government, now that his financial maneuvering space is so curtailed.

Livni, on the other hand, who supported the budget, will use it after September 17 as an excuse to dismiss the coalition partners' financial demands and to proceed to an election, reaping the benefits from the statesmanlike, responsible image she portrayed.

Indeed, the budget approval's repercussions are more political than economic. Everyone knows the budget will not pass in the Knesset, but it has certainly become a pawn in the primary. At the moment Livni has the upper hand. Her supporters were instructed yesterday to convey to the party's field activists, most of whom support Mofaz, that they would be wasting their time and effort on Mofaz, who would not be able to set up an alternative government with both hands tied by the budget. The activists will be told that they would do better to vote for Livni, who can bring Kadima more votes - according to the polls - than Mofaz and perhaps even make it the ruling party.

Mofaz, whose campaign has run into a snag in the past two weeks and whose rise in the polls has been blocked, will have to think of a way to overcome the budget obstacle. He has few cards up his sleeve, except to step up his negative campaign against Livni.