AnalysisHow the state budget became a plaything

To see the terrible cost of a new election, look to the schools

Israel’s politicians seem willing to drag the country to yet another vote, ignoring economic pain of working class families

Haviv Rettig Gur

Haviv Rettig Gur is The Times of Israel's senior analyst.

Israeli children wear face masks on their way to school in Moshav Yashresh, on May 3, 2020. (Yossi Aloni/Flash90)
Israeli children wear face masks on their way to school in Moshav Yashresh, on May 3, 2020. (Yossi Aloni/Flash90)

It’s been a wild ride. This disunited unity government has teetered ever on the edge of oblivion since its swearing in on May 17.

On Monday, it must finally vote on a budget — a budget whose broadest outlines are still not agreed upon — or vote to give itself another 100 days on the respirator, via a “compromise” bill that offers no compromise, only a delay. That’s another 100 days, leading into early December 2020, without passing a state budget for the 2020 fiscal year.

The budget has loomed over the proceedings of the government not, as might be expected, because the politicians have been hard at work drafting the budget bill, and, lamentably but understandably, battling each other over its provisions and the policies and priorities it reflects.

No, it looms because it is the only mechanism available to Prime Minister Benjamin Netanyahu to call new elections — a fourth race in under two years — without having to cede his office in November 2021 to his rival-turned-partner-turned-rival Benny Gantz. Netanyahu and Gantz have been circling each other for months, the former seeking to escape the clauses of his coalition agreement, the latter struggling to hold him to it, and the budget has served as the main leverage in that fight.

And that simple fact is an unconscionable tragedy that should call into question the commitment of both men to the public good.

Prime Minister Benjamin Netanyahu, right, and Defense Minister Benny Gantz lead a weekly cabinet meeting, at the Foreign Ministry in Jerusalem on June 7, 2020. (Marc Israel Sellem)

Netanyahu is willing to play with the economic condition of millions — and, to rein him in, so is Gantz.

A baseline immorality has become the resting state of Israeli politics

Netanyahu has forced one election after another over the past 16 months because none gave him a decisive majority. In the process, in allowing a budget to go unpassed by each successively collapsed Knesset, he has hurt mostly Israel’s working class, as well as the poor and disadvantaged — who are disproportionately his own voters.

And to prevent Netanyahu from breaching their rotation agreement, Gantz has held out too, especially in funding the communities whose political factions he needs to keep in the game. The Haredi parties are desperate for a budget. Their educational institutions and charities are in dire straits. They have asked to pass a special budget bill to keep their schools open. But Gantz believes — and everyone else in the Knesset agrees with him — that as soon as he hands the Haredi parties what they need from him, they will have no more reason to oppose a Netanyahu push for elections. The expectation that Netanyahu and his allies in Shas and United Torah Judaism are thoroughly untrustworthy has made the neophyte politician Gantz, who ran on a cleaner and kinder politics, follow in their footsteps and put politics ahead of the needs of ordinary people.

A baseline immorality has become the resting state of Israeli politics, and few even consider that it could ever have been another way, that in the governments of previous Likud prime ministers, the verbal promise of the prime minister was considered a guarantee.

The trouble isn’t any one politician — though of course the man at the top of the heap bears more responsibility than those beneath him — but rather a systemic culture of double-dealing and duplicity that goes beyond the ordinary run of political ruthlessness. The Knesset struggles to consider legislation or pass budgets, often because MKs from opposing factions do not trust each other enough to carry on the political wheeling and dealing that legislation requires.

In moments of deep-seated political division and colliding loyalties, in the midst of a crisis each faction is desperate to blame on the others, it can be hard to say anything across the yawning chasm of political identity. At such times, one must turn to small, hard details for clarity. It is in the details that the scale of that breach of faith becomes clear, and where on the eve of a possible election, the politicians, and not their critics, owe the country a hard and unpleasant reckoning.

Israelis protest against Prime Minister Benjamin Netanyahu and Blue and White leader Benny Gantz, at Rabin Square in Tel Aviv on May 2, 2020. (Miriam Alster/Flash90)

‘Surplus’ but indispensable

There are literally tens of thousands of budget lines in a state budget bill covering the panoply of expenditures of state agencies, programs, and services. So much is happening in a budget bill, so many reforms and policy reevaluations are represented by those numbers, that there is no easy way to get across how consequential the bill is to the lives of ordinary Israelis.

What, then, is the damage wrought on Israeli society by the fact that no state budget has been in place since the end of 2019? Who suffers and how?

Instead of focusing on direct pain or those hurt immediately by frozen spending, such as the youth at risk programs shut down in recent weeks, it may be more useful to look at an example whose knock-on effects show the scale of the pain inflicted on the country, such as after-school day care subsidies.

There are two kinds of funds allocated in a state budget bill. One sort is mandatory spending required under law. The welfare check to the newly unemployed, the absorption benefits basket to new immigrants, the state health insurance coverage for a newborn — all are legal rights granted by laws that define who is eligible and how much they should receive. The government agencies that pay out those funds have no room for judgment. They are merely carrying out the specific instructions of the legislature.

The Knesset plenum votes on the state budget for 2017-2018, December 21, 2016. (Yonatan Sindel/Flash90)

For example, the Absorption Ministry’s NIS 1.7 billion ($500 million) budget in 2019 may look like a significant figure, but very little of it is actually available for use by ministry officials when one removes the NIS 580 million ($170 million) spent on legally mandated direct payments to the immigrants and another NIS 1.06 billion ($310 million) that must be spent on (again, mostly mandatory) housing solutions.

But there is another kind of funding, called “surplus” when it goes unused by year’s end. These are the funds given to an agency to use as it sees fit for programs of its own devising. In what are sometimes called the “social ministries,” those dealing with people, including the ministries of health, education, welfare, absorption, senior citizens and the like, the majority of each ministry’s budget is designated by law. Most, but not all.

Surplus or, for our purposes, “liquid” funds are not marginal or unimportant — they just are not guaranteed by law. The unemployment check is mandatory. But the Welfare and Labor Ministry’s job training program that works to get the unemployed back into the job market with computer classes, job boards and sessions on interview skills is “surplus.”

Israel’s scientific research and development budgets are almost entirely “surplus.”

The upshot is that when no new budget law stipulates otherwise, the mandatory spending continues, but the liquid spending drops, or in some cases even grinds to a halt.

New immigrants from North America arrive on a flight arranged by the Nefesh B’Nefesh organization at Ben Gurion Airport on August 14, 2019. (Flash90)

Falling through the cracks

That distinction brings us to the country’s tzaharonim, or after-school day care programs.

No one disputes the importance of the program. Most of the Israeli working class holds jobs that run till 3 or 4 p.m. Nearly all of Israel’s schools only run until 1 or 2 p.m. That gap could wreak havoc with the lives of families with young schoolchildren who cannot be expected to sit alone at home waiting for their parents to return from work in the afternoon.

The solution: a nationwide program of after-school day care on school grounds that watches over the kids for three hours, offers them a hot meal and provides an educational or sports curriculum. At the end of each day’s program, school buses then deliver the children to their homes, where they arrive at roughly 4:30 p.m.

As any working parent can testify, the program is a precondition for them to be able to work.

But it is expensive. A 2017 report by the Knesset’s Research and Information Center put the average cost per child at roughly NIS 1,000 ($294) per month. Median household income that year was roughly NIS 16,000 ($4,700) per month. Assuming three children per family (Israel’s fertility rate is roughly 3.1 children per woman), that comes to some 19% of the household’s income — just for three hours of after-school care.

Israeli students wear protective face masks as they return to school for the first time since the outbreak of the coronavirus, on May 3, 2020, in Jerusalem. (Olivier Fitoussi/Flash90)

The reality is even more difficult, of course. Young families with young children tend to earn less than the median.

To offset the expense and keep parents in the workforce, the Education Ministry has used some of its liquid budget to subsidize the after-school programs, bringing the costs for parents down by 90% in many places.

Until, that is, last spring, when the persistent lack of a new state budget led to the drying up of the ministry’s liquid budget and forced an end to the subsidies in many places.

The same budget also funded day camps during school holiday closures, such as over the Hanukkah and Passover holidays, when schools are closed for some two weeks but workplaces are not.

Those camps failed to open at all in 2020. Kids accompanied their parents to work or sat at home unsupervised.

The lack of a state budget law has hurt the most vulnerable worst of all

The lack of a state budget has left working parents — especially lower income ones — with no immediate solutions to the problem. Grandparents stepped in. The coronavirus pandemic “helped” in the bitterly ironic sense that it disproportionately cannibalized the very working-class jobs that made the after-school program such a vital necessity in the first place.

Haredi children from the Bnei Moshe Kretchnif ultra-Orthodox school wear face masks at their school in the city of Rehovot, on May 24, 2020. (Yossi Zeliger/Flash90)

It is important to dwell on this point. The lack of a state budget law has hurt the most vulnerable worst of all.

Israel’s Central Bureau of Statistics maintains a “socio-economic index” of Israel’s population based on where they live. The index divides the country into over 1,600 geographic areas classified according to income and other measures of economic strength, and places each region in a socio-economic “cluster” based on a 10-level hierarchy of “clusters” where 1 is the poorest and 10 the wealthiest. Those who live in Cluster 10 communities earn on average nine times as much as those who live in Cluster 1 communities.

The subsidies in question for after-school day care were only paid out to schools in clusters 1 to 3.

That is, the drying up of those subsidies is not hurting the professional middle class or the wealthy, who were already paying either full price or close to it for the after-school programs, but rather the hardscrabble working class who were not — and who still cannot.

Similarly, when the holiday camps failed to open, white-collar professionals working in comfortable offices dragged their kids to work, sat them in a corner and handed them an iPad. It was only those parents who could not take their children to their factory or restaurant job who struggled.

Large numbers of impoverished Israeli families are trying to cope with the collapse of small businesses and evaporation of working-class jobs due to the pandemic. But the tzaharonim crisis began before the pandemic. The budget deadlock has nothing to do with the coronavirus. No act of God or nature left the country’s poorest workers treading water and struggling to hold on to jobs while the country’s primary day care program for young children lost its subsidies.

Israel’s politicians did that all on their own.

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