http://www.haaretz.com/hasen/spages/810487.html

Cabinet okays NIS 870 million cut from ministries' budgets to finance 
defense hike
By Moti Bassok

The government yesterday approved a 3.5-percent cut, to the tune of NIS 
870 million, in the purchasing budgets of government ministries in 2007. 
The money will go toward an NIS 1.9 billion special supplement for the 
Defense Ministry, although Defense Minister Amir Peretz voted against 
the move.

The cut will not affect the budgets for social welfare, employment, 
higher education, classroom construction, the health basket, multi-year 
plans for the Arab sector, development of the Negev and Galilee, or 
rehabilitation of the North. Prime Minister Ehud Olmert promised that 
the cut would not harm social projects.

A proposal that the health budget not be affected at all by the cut and 
that the budgets for the education and public security ministries be 
only partially affected was rejected.

In addition to Peretz (Labor), Housing and Construction Minister Meir 
Sheetrit (Kadima) also voted against the cut, and eight Labor and Shas 
ministers abstained. Labor faction chairman MK Yoram Marciano criticized 
his party's ministers for abstaining rather than voting against the cut 
when the cabinet would not agree to defer the vote for a week, as the 
faction had decided it would do prior to the cabinet meeting. Thirteen 
Kadima and Pensioners ministers voted in favor of the cut.

"You created a situation whereby the cuts are me, the handouts are you," 
Peretz told Olmert and Finance Minister Abraham Hirchson during the 
debate on the cut yesterday, a mere four days after the Knesset approved 
the 2007 state budget.

Peretz said the Defense Ministry supplement is necessary, due to the 
expenses of last summer's war in Lebanon and the cuts to the military 
budget in recent years, but that the cuts dictated by the 2007 budget 
will harm the weaker segments of society.

He proposed increasing the expenditure for next year's budget and 
suggested deferring yesterday's vote by a week, as the Labor ministers 
had decided, so as to give the government time to get organized for 
increasing the budgetary expenses. Peretz's proposal was rejected by the 
cabinet.

Infrastructures Minister Benjamin Ben-Eliezer (Labor) said he supports 
increasing the defense budget because Israel faces further 
confrontations, but added that the treasury must not force budget cuts 
on government ministries.

Olmert told the cabinet that the ministers can submit a proposal within 
a week regarding what elements of their budgets should be cut, so the 
various ministries can coordinate the cuts with the treasury.

Olmert said the Prime Minister's Office plans to reform the relationship 
between the Finance Ministry and the other ministries, "with the goal of 
allowing the ministries to define their priorities regarding the various 
issues in their budgets." The Finance Ministry, however, said it already 
coordinates budget cuts with the relevant ministries.

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