The lame-duck Olmert government continues its hours-long debate of the 2009 budget.  Prime Minister Ehud Olmert threatened, at the start of the meeting, to fire ministers who do not accept the final vote.  A Labor Party minister, for his part, said his party would quit the government if the budget is accepted as is.

Olmert explained to the ministers that the government could not and would not increase either its budgetary spending framework or the deficit, and that the 2009 expenditures would have to be allocated within those restrictions. Labor Party members, led by former Economics Professor MK Avishai Braverman, say this is not true, and that the economic "pie" can easily be enlarged.

Finance Minister Bar-On has presented the ministers with two alternative budget proposals. One includes a sharp cut in defense spending, and one diverts the cut to national welfare needs.  The ministers were reportedly not enthusiastic at having to choose between the two.

Hint from Uncle Sam

The economic weekly Calcalist reports that the US State Department recently reminded the Israeli Finance Ministry that a condition for receiving the US loan guarantees is that Israel not deviate from its budgetary framework.

Adding to the tensions at the meeting were Olmert's threats to fire ministers who do not accept the government's vote, and counter-threats by Labor - expressed by Minister Raleb Majadele - that Labor would quit the coalition if the budget is passed.  Majadele said that the program is "racist" and that it is unfair to the Arab periphery.

Olmert's Warnings

"Some of those blabber-mouths and shouters who speak dramatically of the plight of the lower classes and the like are simply detached from economic data that have been formulated over the past half-year," Olmert said at the start of the Cabinet session.

He continued: "I want to say in the most friendly and correct matter: There will be a debate today, and it will certainly involve different voices and different opinions, until the matter is decided. Once it is decided, there will be a government stance - and whoever then wages a struggle against the government's stance will no longer be able to be a member of this government. I want this to be perfectly clear."|



Budget Must Also Pass Knesset - and New Government

Commentators and analysts noted that the tensions may be for naught, as the chances of today's vote being truly significant are not great. For one thing, the budget is certain to undergo many changes before being passed in the Knesset - if it passes at all.  In addition, the next government, which is to be formed in a matter of weeks or months, is not certain to follow the present government's current economic policies. 

Joining Labor in its opposition to the proposed budget are the Shas and Pensioners parties, as well as Kadima ministers and Olmert-allies Ze'ev Boim and Eli Aflalo. Housing Minister Boim says the budget does not provide for the acute need for low-income housing, and Aflalo bemoans the lack of a program to improve the sorry state of the Ethiopian immigrant community.

The Cabinet is not expected to vote on the budget before late this afternoon (Sunday).