The 2009 budget has a 4-billion-shekel shortfall, according to the Globes financial news agency.

Prime Minister Ehud Olmert and Finance Minister Ronnie Bar-On failed to reach a decision on a cut of 2-4 billion shekels - a step needed to avoid a breach in the deficit and government expenditure targets.

The shortfalls stem, in part, from incorrect figures projected prior to the Gaza Disengagement of the cost of the expulsion in terms of the expellees' compensation and increased security costs in the areas around Gaza that became the front line. Also cited were the new reservists' law, payments to Holocaust survivors and the hikes in teachers' salaries following several strikes.