The popular birthright israel program that has brought 40,000 college-age students to Israel in the last three years narrowly averted a funding crisis this week. The Israeli cabinet restored much of the $14 million the Finance Ministry had proposed eliminating as part of the government’s emergency budget plan. Had all the money been cut, it may have forced the end of the project.
"It’s encouraging to see that the Israeli leadership recognizes the importance of its role in the birthright israel program for world Jewry," said Marlene Post, chairman of the organization.
She credited Natan Sharansky, the Israeli minister who overseas diaspora affairs, with working with the office of Prime Minister Ariel Sharon and Finance Minister Benjamin Netanyahu to restore the money.
Sharansky told The Jewish Week that his success came after daylong negotiations during Tuesday’s cabinet meeting, which eventually approved by a vote of 21-2 an emergency economic plan that calls for slashing in midyear $2.34 billion from the budget to pull the country from the deepest recession in more than 50 years. Israel is currently running a deficit of $6 billion.
The economic plan, motivated in part by U.S. pressure in return for military aid and loan guarantees, calls for slashing expenses and welfare benefits, firing state employees and making other cost-cutting measures that are so deep that they sparked a call for a nationwide strike by Israel’s major labor federation, the Histadrut, once the state of emergency resulting from the Iraq war is over.
Two ministers from the pro-settler National Religious Party refused to go along with the cuts, claiming they would push 100,000 children and their families (many living in the West Bank) under the poverty line while giving tax breaks to the wealthy.
The Knesset’s 17-member Finance Committee must now approve the proposal and then submit it to the full 120-member Knesset, where it must pass three readings to become law; the first reading is expected April 14.
Among the proposals expected to get close scrutiny would be one that ties defense appropriations to the cost of living index, cuts military severance pay, raises the military retirement age from 45 to 55 and the national retirement age from 65 to 67, and eliminates 10,000 public sector jobs, including 6,000 teaching positions.
Netanyahu conceded that the plan will be hard on his countrymen but reportedly said he was convinced that "adopting the plan will get the economy out of the rut: we’ll repair it, make it grow and then weíll be able to be generous with the public."
Labor Party leader Amram Mitzna was quoted as saying: "The real emergency is not the war in Iraq but the social and economic reality of our lives here. It’s not the gas masks we need, but a strategic change in priorities. Without a political process, it will be impossible to deal with the economic problems."
Senior Labor lawmaker Matan Vilnai said his party opposed the plan because economic growth is contingent upon progress in the peace process.
"There is no one in the world that doesn’t say this, there is no one in Israel’s financial sector that doesn’t say this, except for ther government of Israel," he reportedly said.
Netanyahu had stressed to the cabinet that the Bush administration had conditioned its decision to give Israel $9 billion in loan guarantees and an additional $1 billion in military aid based on acceptance of these reforms.
Supporters of the changes have pointed out that for many people, Israel’s current welfare system makes it more profitable to receive government handouts than to work. They noted Israel’s economy is continuing to falter, dropping 1.1 percent in the gross domestic product, coupled with an average 10.3 percent unemployment rate last year. And last month, the country’s deficit ballooned by another $579 million: a 30-day overdraft record.
On Wednesday, Netanyahu promised that approval of his emergency plan would mean an immediate economic turnaround.
"If we carry on this way, we’ll crash," he warned.
Sharansky said the midyear budget cuts are the deepest in the country’s history and represent a "major attempt to change the structure of our social life … by cutting money from very sensitive areas. Fifty-three percent of our budget is now for public social expenditures: the highest figure of all developed countries."
He said that in arguing for the restoration of the cuts for birthright israel, he had to contend with the Finance Ministry, which argued that it was "cutting money from defense and children and that not to cut the budget of a group that was bringing American Jews here was not fair. I said this was the only Zionist [enterprise] we have and that we have to do everything to support it," he told The Jewish Week.
Before the cabinet vote Tuesday night, the executive director of birthright israel, Shimshon Shoshani, was said to be willing to accept the same 10 percent cut proposed for all government ministries in 2003. The Finance Ministry had proposed cutting birthright Israel’s budget by more than 25 percent this year and then eliminating it entirely next year.
Instead, Sharansky said he convinced the cabinet to cut only about $2 million this year and $4 million next year from the $14 million the government had pledged to provide each year for five years.
The government of Israel is one of three equal partners of birthright Israel. The others are the United Jewish Communities (the umbrella organization for 189 Jewish federations in North America) (which is short about $5 million of its promised $70 million over five years) and a group of 13 individual philanthropists plus Hadassah, each of which pledged to contribute $5 million over five years. The founders of the project are philanthropists Charles Bronfman and Michael Steinhardt.
Bronfman said through a spokesman that he hoped to see the cuts restored by the Knesset and had "great confidence that we will prevail."
Steinhardt said that although the cuts were "certainly far less Draconian" than had been proposed, he too was hopeful the money would be restored by the Knesset.
"Before this comes out of the Knesset, there will be a lot more discussion and debate and I hope the cuts will be restored or diminished," he said. "I think there is a recognition that birthright is a program that, however dire the Israel budget, it is not in the interest of Israel or the diaspora to eliminate."
He pointed out that the program has served as the "spark" that has given the "typical diaspora young person who had a lack of interest [in Israel] an excitement and an interest" in the country.
Post pointed out that for every $1 the State of Israel invests in the project, it gets $2 in return. In its first three years, all three partners contributed $42 million and the project has brought $67 million to the country.
"Israel gets double its money back, so it’s not losing money" on this program, she said. "We employ so many people (those who provide security, medics, the buses, food, hotels) and 95 percent of everybody who came went on El Al and they bought gifts and souvenirs."
Post noted also that birthright israel provided the "largest source of Jewish tourism to Israel" during 30 months of Palestinian violence.
"The tourism industry is decimated and will not turn around overnight, and it was birthright that maintained what was going on in Israel in terms of tourism," she said.
Sharansky said that although he restored some of the proposed government allocation, the reduction that was made is still "a very serious cut. But in the beginning, the proposed cut would have been enough to close down the project."