2009 Budget / PM Has Time to Pass the Budget - but Can He?

One of the most burning issues waiting on Prime Minister Ehud Olmert's desk, and that of the entire cabinet, is the state budget for 2009.

In general, the cabinet tries to finish its annual budget discussions by the beginning of August. The present government had planned on completing its budget debates by mid-July. But it turns out that due to Olmert's busy schedule of police investigations, the cabinet discussions of the 2009 budget - including the thorny issues of education and defense - are just beginning.

Olmert announced Wednesday evening that he will resign after his Kadima Party chooses a new leader in its September primary. The next party chairman will then have to create a new government, which will probably take a month or two. That means Olmert could remain prime minister for at least another three months. That is long enough to have the present cabinet approve next year's budget.

However, another equally possible scenario is that the new Kadima chairman, or chairwoman, will be unable to put together a new government, forcing new elections to be called. Olmert would then head a transition government until the elections, which might not be held until March - or possibly even April or May of 2009.

Thus the real question is not one of time; it is whether Olmert, given his present situation, will fight to pass the budget. It is not at all a simple task, and he may not even be able to put together a cabinet majority in favor.

Shas, as is its wont, will vote against the budget in the cabinet. But if all the Kadima and Pensioners Party ministers support the budget, Olmert could pass it even in the present cabinet. At least some Labor Party ministers might also vote in favor.

However, there is also a possibility that Olmert will keep his promise and resign right after the Kadima primary. In that case, Foreign Minister Tzipi Livni, who is also the vice prime minister, would replace Olmert.

Whoever is chosen to lead Kadima, whether it is Livni or Transportation Minister Shaul Mofaz, will try to form a new government as quickly as possible. He or she may not succeed. But if a new cabinet is formed, one of its very first decisions will have to be the 2009 budget.

But the Knesset is unlikely to agree

The Knesset, however, is a different story. The chances that the Knesset, in its present divided constellation, would pass the 2009 budget in committee and all three readings is mighty slim. And that is a good thing.

It would be best for the state budget, the single most important government document for next year, to be approved by a stable cabinet and a responsible Knesset.