New Budget Crisis as Israel's Defense Chief Demands Extra Army Spending

Defense Minister Avigdor Lieberman says a 2015 agreement allocates $2.4 billion not currently in the 2019 budget

The joint committee on the defense budget, including Defense Minister Avigdor Lieberman, second from left on the dais.
Yitzhak Harari / Knesset

The government’s 2019 budget, which was supposed to win Knesset approval by the middle of next week, looked increasingly in jeopardy Sunday as rifts in the governing coalition showed no sign of being closed.

To complicate matters, Prime Minister Benjamin Netanyahu flew to the United States on Sunday to speak at the annual conference of the American Israel Public Affairs Committee and meet with U.S. President Donald Trump.

In addition to the crisis over drafting ultra-Orthodox Jews, Defense Minister Avigdor Lieberman fueled a new crisis Sunday when he raised demands for an additional 8.3 billion shekels ($2.4 billion) of military spending and urged legislators not to vote for the budget until the extra spending was allocated.

Lieberman made known the demand at a meeting of a special Knesset committee on the defense budget made up of lawmakers from the finance and foreign affairs and defense committees. The MKs were expecting to hold a final round of deliberations on military spending when Lieberman suddenly raised the issue and called for the vote to be delayed.

“We have to set the record straight. We’re talking about the Gideon multiyear plan minus 8.3 billion shekels,” Lieberman said. “We aren’t asking for a supplement or about a fundamental change in the regional security situation. We’re asking to restore the budget to the amounts originally set out.”

Lieberman was referring to a multiyear budget outline that his predecessor Moshe Ya'alon had agreed on with Finance Minister Moshe Kahlon in 2015. The agreement fixes spending levels but makes an exception if Israel’s security situation significantly deteriorated and required more defense outlays.

The MKs heeded Lieberman’s call and put off a vote on defense appropriations until Wednesday. In the meantime, a team from the finance and defense committees, as well as the army, will review Lieberman’s demands.

The defense minister said the Finance Ministry had violated the Gideon agreement by cutting 6.2 billion shekels from spending plus another 2.1 billion shekels because of decisions by the cabinet.

But Finance Ministry officials on Sunday rejected his demands for the extra spending. They said the 2.1 billion shekels was due to changes in the army’s research and development plans and was supposed to be funded from the army's own revenue sources, such as arms sales. The 6.2 billion, meanwhile, was due to across-the-board spending cuts by all ministries. The 2015 accord did not exempt the army from that kind of cut, they noted.

Meanwhile, Finance Committee Chairman Moshe Gafni put off a scheduled vote on the 2019 draft budget and Economic Arrangements Law by the panel that had been scheduled for Sunday, as he held firm that neither would come to a vote until the government arranged votes on bills preventing mandatory army service for ultra-Orthodox Jews.

He also delayed a vote on adjustments to the 2018 budget that had been slated for Sunday.

Gafni’s United Torah Judaism and Shas, the other ultra-Orthodox party in the coalition, have insisted that the budget won’t move to a vote unless the Knesset votes on two pieces of legislation. The first is a Basic Law that would equate Torah studies with military service, while the second would allow the defense minister to defer military service for yeshiva students from the age of 18 to 26, among other things.

Asked by MK Mickey Levy of the opposition Yesh Atid party when the budget votes would take place, Gafni answered, “When I know I’ll do my best to inform you in time.”

Knesset sources said they believed that Netanyahu wanted to end the budget/draft stalemate if he could, but it’s not clear that he is very interested. “If the coalition wants to solve the crisis over the bill on the draft, it could,” said a course who asked not to be identified.

Because of the stalemate, there were calls again in the Knesset on Sunday to delay the end of the legislature’s winter session to March 22 from March 14 and give lawmakers time to solve the budget issue.

The Meretz party had scheduled its primary for March 22 on the assumption that the session would be over, but coalition sources noted that the Knesset House Committee – which has a coalition majority – is authorized to extend the winter session. They said that if an extension would avoid early elections, the panel would vote in favor of one.