One of the themes in Tzipi Livni's campaign was "Bibi, I don't believe him." Others say that Benyamin Netanyahu changes his mind with every conversation. Bill Clinton's White House spokesman described him as "one of the most obnoxious individuals you're going to come into - just a liar and a cheat. He could open his mouth and you could have no confidence that anything that came out of it was the truth." Dennis Ross described one of his sessions in the White House as "nearly insufferable." President Clinton asked, "Who the -- does he think he is?"
http://en.wikipedia.org/wiki/Benjamin_Netanyahu; http://www.independent.co.uk/news/world/middle-east/netanyahu-the-leader-who-struts-like-a-superpower-1570710.html; http://news.bbc.co.uk/2/hi/middle_east/7918089.stm
Livni's message may have contributed to the one seat edge in the Knesset that Kadima won over Likud. Nevertheless, Bibi proved to have the best chance of forming a government coalition.
This week we have seen his weakness and strength. The budget he presented for government approval would be cut by 14 billion shekels over two years, with deep cuts coming in welfare and defense. Child support payments would be cut by 10 percent, despite a commitment to one of his coalition partners to increase them. Also cut would be payments for the handicapped and Holocaust survivors. There would be a 50 shekel fee for every day a patient is hospitalized. There would be a freeze in public sector wages. The retirement age for career military personnel would be increased. The defense budget would be cut by 5 billion shekels over two years.
A day and one half later the government approved a budget with no cuts in welfare payments, no charge for hospitalization, no freeze of public sector salaries, and a cut of defense spending of 1.5 billion shekels rather than 5 billion shekels. However, there would be a 6.5 percent cut in all ministries' budgets in both years of the budget, the value added tax would increase by 1 percent, and expanded to fruits and vegetables.
The details are confusing and not all that important. There are additional steps between the government's budget and the actual spending of the money. First the Knesset must approve it, and later the Accountant General in the finance ministry must actually release the funds on quarterly allotments to the ministries and other administrative units. Both steps provide opportunities for fiddling. The international economic crisis made the process to date more dramatic than usual, and will influence how much money comes into the government via taxes, and how much flows out as expenditures. Natural disasters or war can upset all expectations.
What is interesting in this week's flip flops are their demonstration about Netanyahu's style of governing, or not governing. Also apparent is the centrality of the budget and its lack of clarity.
Bibi was at the center of the budget process by boasting of economic expertise (including a claim to have been offered the post of finance minister in Italy), and giving himself and an aide from outside of the public service key roles in the intense dealing that shifted prominent elements of spending and taxation over the course of 36 hours. The party operative and PhD in philosophy that he appointed as minister of finance appeared to be a figurehead who stumbled through media interviews in which he did little more than assert his cooperation with the prime minister. The respected head of the budget unit in the finance ministry resigned in protest.
Like the budgets of other governments, Israel's is a large and detailed collection of documents, filled with do's and don'ts for taxes and spending that amount to a sizable portion of national wealth. In Israel's case it is about 44 percent of Gross Domestic Product.. Accompanying the budget is a "law of arrangements" that details changes in existing laws presented in a way that is incomprehensible to all but a handful of bureaucrats, politicians and beneficiaries.
The budget is comparable to the human brain. Both are central organs that determine what the rest of the body does, and both are the subject of research by economists and political scientists on the one hand, and a host of biological scientists on the other. Each cluster of specialists has learned a great deal about what they are studying, but has a longer list of what they want to know, but they have not been able to discover as yet.
Netanyahu's smooth rhetoric is the flip side of his reputation for unreliability. He is presenting the budget as his success in achieving harmony between competing interests. To him it represents reluctant compromises, but a well balanced set of agreements with representatives of the public and private sectors, including unions and the leaders of industry and finance. Its reduction in the top rate of the income tax will keep funds flowing to investment, and its increase in the value added tax and its extension to fruits and vegetables, despite falling most heavily on the poor, will help reduce the deficit and pay for increases in welfare payments.
All that may be true. It is not easy to judge the policy implications of an opaque budget at any time, and especially during a time of economic fluidity. To the extent that politics depends on at least a minimum of trust, however, the fluidity of Netanyahu's commitments is a problem for all who must deal with him.
This week his partners in deliberations were colleagues in the government, key bureaucrats, the head of the Labor Federation, and representatives of large employers. Next week it will be the President of the United States. The prime minister will go to Washington saying that it is not timely to talk about a Palestinian state, and that Israel's first priority is the threat of Iranian nuclear weapons. It is anybody's guess what he will be saying in Washington, and then when he returns to Israel. We can only hope that he achieves better rapport with the Obama White House than he did with Bill Clinton's.
I welcome comments sent to my e-mail address, below.
Ira Sharkansky (Emeritus)
Department of Political Science