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Sharon Faces Budget Hurdle in Final Push Toward Withdrawal

March 8, 2005
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As plans for Israel’s withdrawal from Gaza and part of the West Bank intensify, its opponents are banking on one last throw of the parliamentary dice: Knesset rejection of the state budget for 2005. If the budget is not passed by March 31, the government will fall, there will be new elections and disengagement will be deferred — perhaps even shelved.

With the vote only a few weeks away, a major battle between Prime Minister Ariel Sharon and the rebels in his own Likud Party is shaping up. Thirteen of the rebels say they will nix the budget. Without their support, Sharon will not have a majority.

To make up the shortfall, Sharon will have to cut a deal with one or more of the opposition parties.

Over the past few weeks, he has been wooing a motley crew of disparate candidates: the fervently Orthodox Shas Party, the secular Shinui, the left-wing Yahad and the United Arab List.

The smart money says he will pull through at the last minute. But the disengagement opponents will make it as tough as they can, and any support he gets from the opposition will come at a price.

Moreover, the rebel persistence in trying to thwart the prime minister and even topple his government could split the Likud. Before gearing up for the budget battle, the rebels made one last effort to foist a national disengagement referendum on Sharon, getting the Likud Central Committee to pass a resolution last week urging the party’s Knesset caucus to promote the appropriate legislation.

Although there is little chance of this — Sharon remains adamantly opposed and there is a solid majority in the Knesset against the referendum idea — the rebels again succeeded in humiliating the prime minister. The sight of Sharon being booed and heckled by activists in his own party on March 3 fueled new speculation over an imminent rift in the Likud, with Sharon leading a moderate wing into an electoral alliance with Labor and Shinui.

Some pundits believe that the battle over the budget could accelerate such a shake-up in Israeli politics.

To get the budget through convincingly, Sharon needs the support of Shas or Shinui. Shas is demanding the immediate restoration of child allowances, which were cut in Finance Minister Benjamin Netanyahu’s austere budget proposal. In a meeting with Shas leader Eli Yishai, Sharon aides offered to restore the allowances, but only for people below a certain income level

Yishai wavered for just a minute, but then rejected the offer on the grounds that it would take two years to implement. So far there has been no comeback from Sharon. His people believe Shas doesn’t really want a deal, and prefers a new election in which it hopes to win more seats and a place in a new government.

And Shinui leader Tommy Lapid is playing hard to get. In a late February meeting on Sharon’s farm, Lapid told the prime minister that he was prepared to support the budget on one condition: That Sharon agree to take Shinui back into the government.

But Shinui left Sharon’s coalition in December over the transfer of $66 million to the haredi, or fervently Orthodox, educational system. Shinui’s return would probably lead the haredi party, United Torah Judaism, to leave the coalition in protest, as well as to a new rumpus in the Likud Central Committee, which opposes a government that includes both Labor and Shinui.

The chances of Sharon taking Shinui back into government, therefore, are not high. The question is whether Lapid, in opposition, will be able to stick to his guns and vote against the budget, even though that means putting the disengagement plan he and his party support at risk. Lapid will be under tremendous pressure to back down.

Recent polls show that 81percent to 90 percent of Shinui voters back the disengagement plan, and 69 percent of party supporters say it should vote for the budget, if its voting against or abstaining leads to the fall of the government.

Indeed, according to the polls, if Shinui votes against the budget and stops disengagement, it could lose about half its electorate. Just over 50 percent of its voters say they won’t vote for Shinui if it precipitates an early election over the budget.

If neither Shas nor Shinui support the budget, Sharon could still squeeze through with the support of the left-wing Yahad, the United Arab list, three independent Knesset members and a couple of Shinui Knesset members who conveniently might fail to show up for the vote.

Yahad is certain to back the budget, if it has to, for the sake of the disengagement plan; the two Arab Knesset members are already negotiating over housing, development and local council budgets in the Arab sector in exchange for support; and the three independents have all indicated they will vote in favor.

But if he goes this route, Sharon’s victory would be by the slimmest of margins. The trouble is that because this year’s budget and the future of the disengagement plan are so intimately connected, Sharon would prefer a much more comprehensive victory. He’d like not to lay himself open to right-wing charges that ultimately the disengagement went through on the votes of the left and one of the Arab parties.

The fact that the budget battle is really a battle over disengagement has led to a dearth of public debate over the real budget issues.

Labor’s Yuli Tamir was something of a lone voice when she criticized Netanyahu’s budget priorities in a scathing article in the daily newspaper Ha’aretz.

Even left-wingers like Tamir concede that Netanyahu’s tight fiscal policy has led to economic growth, a lowering of unemployment and international plaudits for Israel’s economic performance. But, she says, success has come at a price the winding down of the Israeli welfare state.

“In Netanyahu’s vision, private investors will run our lives and derive profit not only from running economic organizations, but also from giving inoculations to infants, helping children in need and caring for the disabled and the elderly,” she wrote. “Anyone who believes it is possible to provide egalitarian and qualitative social services and make a profit should speak up now.”

Like everything else, though, the budget this year is taking a backseat to the grand disengagement scheme, which Sharon — and many on the left — believe will lead to a strategic change that goes well beyond budgetary concerns.

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