Steinitz Plan Didn't Envision PM Picking Up the Reins

It is good for the chairman of the opposition to have a clear economic program before the elections in case he is elected prime minister.

Unfortunately, when Benjamin Netanyahu was elected prime minister, there was no solid economic agenda. As in the diplomatic arena, reality dictated his moves. Therefore, just before he took office in February, when he understood he had no plan of action or priorities, he asked MK Yuval Steinitz to establish a team, mostly Likud figures, to formulate a work plan and priorities for the government's first months in office.

The team put its recommendations on Netanyahu's desk in March. They focused on several areas: the 2009 state budget, the credit crunch, governmental reform, reform in the realms of personal security, education, the Israel Lands Administration and the planning and building committees, recommendations on Israel-United States relations and the area Netanyahu calls "economic peace." In addition, the team had recommendations on relations between the Histadrut labor federation and the industrialists, improvements in flight safety, the environment, the energy economy and Jerusalem.

This week, 100 days after Netanyahu's government was sworn in, the report reveals, from its opening pages, that the Steinitz team ignored central issues that impacted and continue to impact the work of the cabinet. For example, they did not refer to the future appointment of Netanyahu as minister of economic strategy, which makes the prime minister, rather than the finance minister, Israel's architect of economic policy.

Nor did the report take into account that for the first time in the history of Israel's governments the prime minister, rather than the finance minister, will head the socioeconomic cabinet and decide important issues in this area, including the state budget. The team's recommendations also did not state that the prime minister would have a supreme economic adviser (Uri Yogev), who would dictate his policy to the treasury.

The 52-page report contains a number of recommendations necessitated by reality such as the major recommendation to prepare and approve the state budget for 2009 together with that of 2010, and to postpone debate and approval on the two-year budget in the cabinet and the Knesset. By law, the new government must pass the 2009 budget within 45 days of taking office. Because some six months of 2009 have gone by since the new government was sworn in, and because in ordinary years debate on the budget for the next year, 2010, would have begun in June, the decision on a two-year budget was logical. It was clear that a serious discussion could not take place on two budgets within 45 days. That is why the committee recommended, and the Knesset accepted, postponement of the legal date for approving the budget from 45 days after the establishment of the new government to 106 days, that is, to July 15, 2009.

In addition to this recommendation, there were other logical proposals that will probably not get off the ground. They include "a comprehensive program to rehabilitate income tax from the point of view of management, morale, lack of human resources and increased collection as a means of stopping the decline in state revenues and reducing the deficit in the coming years."

In contrast, it is difficult to understand where some of the committee's as yet unimplemented recommendations came from, such as "consideration of quick legislation to prevent the release of pedophiles who have served their sentence unless they accept continuous monitoring and long-term preventive treatment."

Another unrealistic proposal was that the government "launch within 200 days a pilot plan for municipal police departments under the operational aegis of mayors in 10 to 15 big and medium-size cities."

There were other recommendations that have been making the rounds in extreme right-wing circles for some time, which undermine the democratic system; these, too, have not been implemented. They include "preventing the dispersal of the Knesset during its term except for rare occurences stemming from unprecedented exigencies," or the proposal to allow Israelis who have left the country for good to vote in Knesset elections.

Who is the finance minister??

Netanyahu wanted to be prime minister and finance minister. Steinitz rejected his proposal that Steinitz be a minister in the Finance Ministry. He wanted the whole job. While Steinitz has the title of finance minister, even the most junior backbencher knows that Netanyahu is the supreme economic minister. Netanyahu led the cabinet's approval of agreements with the defense establishment over the heads of the finance minister and his leading officials. And Netanyahu decided the debate on who will supervise the salaries at the Bank of Israel, damaging the status of the supervisor of salaries in the Finance Ministry. The prime minister also led the move to lower income tax for the upper deciles from January 1, 2010, over the opposition of Finance Ministry experts.

For these reasons, Steinitz has been unable to function as a senior cabinet minister. Months will pass until he learns, if he does, how to stand on his own two feet. Until that time, Netanyahu will continue to function as the supreme overseer of Israel's economy, and even a program for the first 100, 200 or 1,000 days will not change that.