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Defense, treasury meeting again over budget impasse

Lapid says IDF funding would come at expense of middle class; Defense official accuses Finance of hiding a budget surplus

Defense Minister Moshe Ya'alon meeting with soldiers during a visit to the Tze'elim military base on July 9, 2013. (photo credit: Ariel Hermoni/Ministry of Defense/Flash90)
Defense Minister Moshe Ya'alon meeting with soldiers during a visit to the Tze'elim military base on July 9, 2013. (photo credit: Ariel Hermoni/Ministry of Defense/Flash90)

The bitter standoff between the Finance and Defense ministries over the 2014 defense budget continued Thursday, with the sides meeting again over planned cuts to the IDF.

Finance Minister Yair Lapid and Defense Minister Moshe Ya’alon held hours of informal closed-door meetings on Wednesday, joined at times by Prime Minister Benjamin Netanyahu and Chief of Staff Benny Gantz.

The two were sitting down again at noon on Thursday, after which the national security cabinet was scheduled to formally debate the issue.

The cabinet was set to meet on the matter Wednesday, but postponed the planned discussion after Ya’alon and Lapid failed to come to consensus.

Wednesday’s talks between the two ministers turned tense as treasury and Defense clashed over the question of whether social services or national security should be given budgetary priority.

“Any addition to the military’s budget will come at the expense of the middle class, health, education, and welfare,” Lapid argued, according to the Ynet news site.

“The money should go to child care and housing for young couples. The Israeli middle class does not understand why a wasteful and bloated system should be supported at its expense in every new budget.”

Lapid also accused the Defense Ministry of presenting unrealistic doomsday scenarios to justify reversing or reducing its budget cuts.

But Defense said there was actually a budget surplus that was being kept secret, at soldiers’ expense.

“The Finance Ministry is operating like a body that has a state,” a source in the Defense Ministry said, according to Ynet. “It incites against career soldiers who earn very low salaries. Finance is required to present the budgetary surplus to the prime minister and national security council but did not do so, and is still refusing to do so. There is a cabinet decision that defense will have priority in case of a surplus, because it was obvious our budget was lacking. The finance minister voted for this. Now the Treasury is denying it and refusing to disclose the surplus.”

“This is a shameful political debate and not a debate on the issues,” the source added.

Netanyahu is reportedly leaning toward the Defense Ministry’s position, according to Channel 10 news.

Gantz requested an extra NIS 4.5 billion ($1.28 billion) for the defense budget Wednesday afternoon, arguing that the army would have to cut training programs if it doesn’t receive the extra allotment from the Finance Ministry.

In May, the government set the IDF budget at NIS 51 billion ($14.5 billion). The military took a cut of NIS 3 billion from its 2014 budget, but is now arguing that the cuts will actually amount to NIS 7.4 billion due to factors beyond the IDF’s control, such as higher electricity costs and taxes, payments for injured soldiers and additional benefits for career soldiers due to the rising retirement age.

For its part, the IDF said it has done its part to live up to its end of the budget, making cuts to its workforce and, in June, halting operational activity for reservist units for the rest of this year.

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