-
SEE RED AND SAVE
A LOT OF GREEN$$
1995
LeSABRE
Cabinet Backs
Budget Cut
Jerusalem (JTA) — Israel's Cab-
inet has agreed to slash some
$670 million from the govern-
ment's $44.3 billion budget for
1996.
With the Cabinet's approval,
the 1996 budget will go before
the Knesset for a final vote in
October.
The 14-6 decision by govern-
ment ministers to approve the
7- ) cuts, reached during a marathon
session during the Cabinet's
weekly meeting, came after Trea-
sury officials warned that it was
the only option if the government
wanted to deal with the budget
deficit while preserving the coun-
try's economic growth.
Finance Minister Avraham
Shohat argued against another
option — raising taxes — a move
certain to be unpopular with
Israeli voters as the country's
national elections, slated for
November 1996, loom ever closer.
According to Mr. Shohat's pro-
posed plan, the 1996 budget
deficit will be $2.27 billion, corn-
pared with the $2.38 billion
deficit estimated for this year.
Jacob Frenkel, governor of the
• Bank of Israel, supported the
Cabinet's decision, though he had
called for yet deeper cuts in
spending.
Further discussions are sched-
uled to take place next month,
when the Treasury is expected to
ask the government to set na-
tional priorities and work with
each ministry to cut costs.
Most of the opposition to the
• cuts came from ministers with
social portfolios.
Labor and Social Welfare Min-
ister Ora Namir said after the
meeting that if the cuts were
made, they would immediately
affect society's weaker members.
Concerns have also been raised
about how budget cuts would
affect defense spending — par-
ticularly as government officials
attempt to estimate the cost of
redeploying the Israel Defense
Force in the West Bank. The re-
deployment will take place when
the next phase of Palestinian self-
rule is implemented.
Most reports place redeploy-
ment costs between $500 million
and $1 billion, which would in-
clude the cost of moving IDF
• , bases and providing new securi-
ty measures for West Bank areas
not under Palestinian adminis-
tration.
Prime Minister Yitzhak Rabin
met last week with Finance and
Defense Ministry officials in an
attempt to resolve the differences
between the defense establish-
ment's request for an additional
allocation of some $833 million to
fund "Rainbow 2," as the rede-
ployment plan is called, and Trea-
sury calls for a $200 million cut
in defense spending.
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