Shamir Bracing for a Storm Within His Coalition over Proposed Massive Budget Cuts

Premier Yitzhak Shamir is bracing for a storm within his coalition when the Cabinet convenes in special session tomorrow to consider massive budget cuts proposed by Finance Minister Yigal Cohen-Orgad to rescue the country from its present economic travails.

Shamir hopes to line up the Herut ministers behind an economic program that contains many painful and politically unpopular elements and thereby cajole or force his coalition partners into accepting it. He and Cohen-Orgad were engaged in intensive consultations today with other ministers and faction leaders, some of whom have already announced their opposition to proposed cuts.

Cohen-Orgad met this morning with Energy Minister Yitzhak Modai, one of the more vocal critics of government economic policies. According to unconfirmed reports, Modai indicated that he would pose no problem at tomorrow’s Cabinet meeting. But as a leader of Likud’s Liberal Party wing, he must contend with his faction’s intense dislike of proposed tax increases. The Liberal Party Executive is scheduled to meet tonight to discuss the new economic measures.

OPPOSITION WITHIN HERUT

Cohen-Orgad, who stresses that he has Shamir’s total support, still faces opposition within Herut. Deputy Premier David Levy who is also Minister of Housing and Construction, is fearful that a proposed freeze of development programs will cause unemployment, particularly in the construction and allied trades. He has indicated that he will not accept an economic program which carries with it government-induced unemployment.

Minister of Commerce and industry Gideon Patt complained today that he was not consulted about proposed cuts in development programs. He indicated he was not at all enthusiastic over the new program.

Cohen-Orgad has no personal power base within Herut and must depend on Shamir’s influence to sway colleagues such as Levy. Both men face difficulties with the smaller coalition factions.

Tami opposes any cuts in social services. The National Religious Party which holds the Education portfolio has made it clear that it will not accept the abolition of free high school education, instituted six years ago. Tehiya announced it would quit the coalition if the government imposed a freeze on new settlements in the occupied territories.

Tomorrow’s Cabinet session will be held against the background of spreading labor unrest. There has been a wave of strikes and work slowdowns among government employes during the past week, protesting the erosion of wages by triple-digit inflation. The civil service unions announced additional sanctions today.