No Agreement on Budget Allocations

The Cabinet’s economic committee wrestled inconclusively yesterday over how to divide the IL 405 billion budget for the next fiscal year between the various ministries. No agreement was reached after 11 hours of wrangling during which Premier Menachem Begin was summoned from his home to support a demand for cuts in the defense budget. But Begin proved to be of little help and the issue was deferred to the full Cabinet meeting this Sunday.

The problem is that Finance Minister Yigal Herwitz has declared the IL 405 billion to be the absolute maximum which, if exceeded, would lead to uncontrollable inflation. The budget was approved earlier this week as a framework within which each ministry will have to find the funds to finance its operations. But as the economic committee found, the budget is not big enough to cover what each minister insists is the absolute minimum.

THE MAJOR CONFRONTATION

The major confrontation is between the defense budget and the housing budget. Defense Minister Ezer Weizman did not attend yesterday’s session. When he was informed by telephone that his budget would have to be pared to allow for additional housing money, he was furious. “If any one decides on cuts let him run the Defense Ministry,” Weizman declared, a remark that some of his colleagues took as a threat to resign if his budget is tampered with.

Weizman remained adamant in a clash last night with Begin. The Premier warned him that his unbending attitude could lead to a Cabinet crisis and urged that he agree to a two percent reduction of the defense budget that presently stands at IL 130 billion. It represents about one-third of the proposed IL 405 billion for the next fiscal year beginning April 1. But Weizman refused to entertain any further cuts. He said the defense budget had been agreed to by himself and Hurwitz and to reduce it by even two percent would be courting danger.

In a television interview last night, Weizman said the defense budget had been cut by eight percent over the last three years and that he had done his utmost to hold down dollar expenditures in favor of the local defense industry. He warned that an IL 1 billion cut would result in the layoffs of up to 1000 workers in the defense and allied industries. He noted that the army will have to absorb 100 new tanks and 100 new artillery pieces this year.

Those who insist an a cut, Weizman warned had better look at the massive build up of Soviet weaponry in Syria and other Arab countries which include the most modern T-72 tanks and MIG-25 planes. He noted that some ministers who wanted to slash his defense budget were highly skeptical of the peace process with Egypt. “I would advise them, at least, to be very careful not to tamper with the defense budget,” he said.