Olmert's Fight for Survival

Both Olmert and Labor MK Avishay Braverman must tell the people the truth - that it is impossible to continue with business as usual. It is also impossible to both suffer from the damages of the war and also to destroy the economy.

"A number of alternatives are being considered," Prime Minister Ehud Olmert declared last Thursday. "The answer will be given on Sunday," Olmert's close associates added, noting that the prime minister would be holding a series of consultations, including on Saturday night, in connection with a fateful question: What type of commission of inquiry should be established? Olmert also asked the attorney general to provide him with details about what types of commissions could be established. The prime minister devoted five days to the issue.

In contrast, Olmert made the decision to go to war lightning fast. One conversation with the chief of staff was enough.

If at the time, on that bitter and hasty Wednesday, July 12, he had devoted two or three days to reviewing the army's plans and their ramifications, and to analyzing possible developments, perhaps there would have been no need today to establish a commission of inquiry.

But how is it possible to make the comparison at all? Today, he is dealing with his personal fate; then, it was only a matter of war, of fatalities and casualties, destruction, and serious damage to society and the economy.

The Olmert of today is very different to the Olmert of July 11. Then, he had a political agenda, which included a courageous move in the form of a unilateral withdrawal from the West Bank. Today, he has a personal agenda, which is entirely survival. Then, he had a responsible economic agenda of maintaining a low deficit. Today, he is saying behind closed doors that there no avoiding a breaching of the budget framework and increasing the deficit even beyond 3 percent.

And when the treasury's Budgets Department presents him with cuts designed to finance the army's demands, he says: "This isn't the time or the place; it is difficult; it is a coalition thing; and how am I going to get the public to buy it?"

Olmert is trying to buy everyone. And so he set out on a whistle-stop tour of the North, promising the heads of the local authorities at every stop that he will send them budgets in order "to jumpstart the North to completely new heights because this is the main task to which the government is devoting itself."

He is hoping thereby to muffle to some extent the anger that the people in the North are feeling toward him.

And the army, which senses the prime minister's weakness, is trying to place all the blame for the military failure on the budget. The chief of staff is demanding in the most cynical way a fantastic sum of NIS 30 billion to finance the costs of the war, boost supplies, renew equipment, and also to increase the budgetary basis to a new height of NIS 49 billion a year. Instead of standing firm in face of the extortion, and demanding that the chief of staff provide him with efficiency plans and ways to cut the army's tremendous layers of fat, Olmert plans to capitulate to the Israel Defense Forces - to prevent Chief of Staff Dan Halutz from opening another front against him.

Rather than a lack of money, the IDF's problem is in fact an excess of it, and this has turned it into a fat, clumsy army that sees first of all to the standard of living of the career soldiers on the home front. The army is in dire need of a strict diet, and not an addition of fat, which will only exacerbate its sickness.

Olmert is now looking for ways and means that will allow him to "be good" to everyone, and to remain within the framework of the Budget Law at the same time. The trick is to "exclude" the costs of the war from the budget - in other words, to turn all of the expenses of rehabilitating the North and increasing the IDF budget into "a one-time war budget," as was the case with the disengagement. The opportunity can also be used to include in the "one-time" basket social expenditures in order to curry favor with the coalition partners and thus keep the government intact.

The idea is to create two budgets for 2007. One will adhere to restrictions stipulated in the law with regard to the size of the budget and the deficit; the second, the special budget, will breach these restrictions and the deficit will be much larger than 3 percent.

Such tricks may be able to pull the wool over the public's eyes, but not the economy's. An increase in the budget depresses activity in the business sector. If the "fat man" (the public sector) grows, the "thin man" (the business sector) is forced to shrink. Raising the government deficit leads to higher debt, higher long-term interest rates, a lowering of Israel's credit ranking and an undermining of investments. Devaluation will return, inflationary pressures will increase, the governor of the Bank of Israel will raise interest, the stock market will decline - and thus the economic crisis will rear its head again, accompanied by a decline in growth and a rise in unemployment. And the ones to suffer most will be the weaker sectors of society.

Opinion polls indicate that the public is opposed to cuts in the budget. Most of the public wants the army to get everything it requires and to see social budgets remain untouched. After all, we all would like to be both wealthy and healthy. But leaders must not deceive the people. Both Olmert and Labor MK Avishay Braverman must tell the people the truth - that on July 12, the priorities changed, and therefore it is impossible to continue with business as usual. It is also impossible to both suffer from the damages of the war and also to destroy the economy.