Budget Woes in Israel Cast Doubt on the Future of Birthright Program

Israel’s government gave preliminary approval to a 2004 draft budget that includes $2.2 billion in social service cuts — and threatens the future of the birthright israel program.

With the country in the midst of a deep recession and defense spending weighing heavily on the economy, the proposed cuts threaten to leave many in Israel underfinanced and overwhelmed.

Among the budget cuts’ most vociferous opponents — and potentially its biggest losers — are the country’s welfare recipients, who are lamenting what they perceive as Israel’s growing distance from its socialist, welfare-oriented roots.

The 2004 budget, a major test of Finance Minister Benjamin Netanyahu’s influence on Israeli economic policy, must now pass three Knesset votes.

The birthright israel program, which its sponsors have billed as the country’s largest source of Jewish tourism during the three-year intifada, stands to lose almost all its funding from the Israeli government.

The program, which provides free trips to Israel for Jewish youths aged 18 to 26 who have never before visited Israel on a peer tour, will see its government funding cut from $14 million to less than $500,000 if the proposed budget passes.

However, Israel’s government pledged to restore its full financial participation in birthright in 2005, Natan Sharansky, the minister for Jerusalem and Diaspora affairs and member of birthright’s board of directors’ steering committee, told JTA on Tuesday.

The government of Israel is one of three equal partners in birthright israel. The others are the United Jewish Communities, the umbrella federation group, and private philanthropists, including some Jewish groups.

That restoration came on the heels of an 11th-hour conference call between Sharansky, Michael Steinhardt, one of birthright’s founders and primary sponsors, and Netanyahu.

"The refusal of one side" to carry out its funding commitment to birthright "immediately influences the other side," Sharansky said in a telephone interview from Boston, where he is on a speaking tour of college campuses.

Sharanksy, a Cabinet minister, said he postponed his vote on Netanyahu’s budget until birthright was discussed.

"It was a very delicate situation," he said. "The finance minister said we can’t keep giving money to American kids to come to Israel when we cannot keep money for the most needy in Israel. But in these critical times, it is the only successful program working as a bridge between the Diaspora and Israel."

In the wee hours of Tuesday morning, 14 Cabinet ministers OK’d the draft while nine ministers, among them members of Shinui and Likud Party, voted against it

Mindful of the ongoing Palestinian intifada, Defense Minister Shaul Mofaz fought off proposed defense cuts of approximately $700 million. Instead, already-gutted social benefits were further reduced across the board by $250 million. It was not immediately clear how the remaining $450 million shortfall would be covered.

"If this budget passes, it will created a social state of emergency and will hurt the State of Israel’s character to the core," the head of the national labor federation Histadrut, Amir Peretz, told Israel Army Radio. "We intend to fight with every means available and deploy on every street corner to fight the plan."

The Histadrut said it was mulling a nationwide protest strike.

Underscoring economic woes in the country — which now has an unemployment rate of 10.6 percent — police this week said a indebted Beersheba man shot and wounded a repo officer who came to impound his property before turning the gun on himself.

Those saved from budget cuts include retirees, the severely disabled and Holocaust survivors. Among those taking the brunt of the budget axe are teachers, 7,000 of whom may have to be laid off due to a $240 million cut in the state’s education allocation.

The proposed budget is expected to have a rough ride when it reaches the Knesset, probably in late October.

Ministers from the secularist Shinui Party who originally backed the draft turned against it on Tuesday after Israeli Prime Minister Ariel Sharon decided not to accede to their demands to divert funds away from the Religious Affairs Ministry.

Members of Sharon’s government described the budget as part of the streamlining effort that was one of Sharon’s election promises.

"The main goal is to reduce the size of government. If we don’t do that, the economy cannot grow," budget director Ori Yogev said after the vote.