Netanyahu's Seat

The prime minister will pay any price to stay in office, even if it means sustaining an inflated defense budget.

Yuval Steinitz is acting as if he's in a battle for his life, sparing no word or deed to warn us of the gathering storm. The finance minister has described the growth of the defense budget as "wild," criticized the news reports implanted by the army over the latest Hezbollah rocket threat, and garnered support among ministers and journalists for his desperate demand to curtail defense spending.

Prime Minister Benjamin Netanyahu
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A high-level Finance Ministry official describes Ehud Barak as the "most expensive defense minister in Israel's history," and Udi Nissan, the Finance Ministry's budget director, says such massive defense spending comes at the expense of welfare, education and health services.

The defense budget has experienced fantastic growth over the past few years - from NIS 44 billion in 2006 to NIS 55 billion this year. The recommendations of the Brodet Commission that was tasked with examining the defense budget have, in Nissan's view, collapsed and efforts to streamline the defense establishment were barely carried out.

What's more, of the billions in misdirected funds, "the portion allotted for salaries is rising while the army's fighting power is on the wane. That has to change," says Nissan.

Steinitz has compared the defense budget's meteoric rise to "an F-16 taking off," while other government ministries chug along "like an old Piper plane." That growth, he said, reminds him of the steep spike in defense spending following the Yom Kippur War that led the Israeli economy to a "lost decade." The finance minister doesn't want another.

Let there be no mistake - Steinitz's demands are exceedingly modest. He seeks only to reduce the budgetary increase the Israel Defense Forces would receive from NIS 3.4 billion to NIS 2 billion. That small cut could return the military to within the parameters outlined by the Brodet Commission, which it somehow managed to exceed.

The panel's recommendations were the worst thing ever to happen to the state budget. The government approved them in 2007 as part of a misguided attempt to implement the lessons of the Second Lebanon War, and the result was that the IDF began receiving fantastic budgetary additions at the expense of social, educational and welfare services.

At the same time, the army failed to meet its obligations to streamline. The IDF continues to oppose raising its retirement age to a more reasonable level, a move that would save billions - today one may leave the army at 42 and receive a pension for 38 years! It's unclear why an economist at the Kirya defense compound in Tel Aviv can't work until 60 before retiring.

Steinitz has already promised on several occasions to personally file a decision to raise the retirement age, though he is doing so with full knowledge that he may fail. The army continues to make fools out of us, claiming with unimaginable chutzpah that raising the retirement age would only bring about a spending increase (! ).

The defense establishment lives in its own world, without effective parliamentary supervision. At the start of the year it is budgeted a certain sum, but by year's end that has grown by some NIS 3 billion or NIS 4 billion. The army refuses to cut its number of employees despite overlaps within its ranks, and is unwilling to shrink the bloated defense delegations to New York, Washington, Paris, Brussels and Berlin, which serve as wonderful professional sabbaticals for their cronies.

It's clear Steinitz is wagering the entire weight of his influence on this gambit, but he is a featherweight. Barak is hardly paying him any mind. The finance minister will meet with Benjamin Netanyahu next week, scare him a little and receive whatever it is he wants.

The prime minister, after all, isn't worried about the damage that could be caused to society and the economy. All that's important is his own seat, for which he is willing to pay any price required.