Finance Minister Yair Lapid – Photo: Reuters
It worked. Lapid won 19 seats in the last election. But then he realized that he had no choice but to accept the role of finance minister, and come through on all of his campaign promises.
No one can blame Lapid for the country’s massive deficit. He inherited it from the last government, of which he was not a member. It is also unfair to blame a fledgling politician for pulling out the heavy artillery of campaign slogans and promises, aimed at the soft underbelly of his target audience. What can you do? That’s the only way to conquer the Knesset. And he did succeed in doing that.
I’m not sure whether the majority of Lapid’s voters, members of the middle class, actually feel betrayed. They may still be giving him a chance. Some of them probably believe him when he says that the austerity measures he plans to impose won’t be in place for long.
It wasn’t just during his election campaign that Lapid promised to protect the middle class. He made similar promises after taking the finance minister seat. In one of the first Facebook posts he wrote as finance minister he spoke about the now infamous Ricky Cohen from Hadera (a fictional character he invented to represent the middle class), who, together with her husband, has a monthly income of just over 20,000 shekels ($5,600). In that post, Lapid wrote that “if we don’t look out for the middle class, the entire economy will grind to a halt and the country’s debt will grow worse. That will not happen on my watch. With time, the people who currently hold the entire country on their backs will find that they no longer serve as the country’s ATM. They are no longer the ones the state keeps resorting to for cash every time there is a problem. And Mrs. Cohen will learn something else as well: That the state is actually grateful to her.”
Even if the state did in fact say “thank you” to Mrs. Cohen, it is safe to assume that she never heard it over the din of the protest she was attending in front of the finance minister’s house. Because in the meantime, he has decided to raise her income tax and value added tax.
The website of Lapid’s party Yesh Atid — which incidentally is one of the very few party websites that still gets regularly updated — contains the party’s platform. The party’s economic views make up a substantial part of the platform. In it, Lapid presents his economic plan. He calls it the “nine point plan” and it encompasses a wide range of areas that require reform to create an egalitarian and just Israeli society. Even if, after becoming finance minister, Lapid realized that he couldn’t fulfill all the promises he had made, one would expect the nine point plan to be at least at the basis of his work plan. But it’s not.
Let us begin with the first of the nine points. Under the heading “increasing the rate of participation in the workforce,” Lapid raises a list of proposals: Implementing negative income tax, subsidizing day care centers for working mothers, improving public transportation between the center and the periphery and more.
In the meantime, the negative income tax has become more positive than ever; the subsidized after-school programs implemented on the recommendation of the Trajtenberg committee are about to be canceled and Transportation Minister Yisrael Katz had to fight Lapid to prevent him from scrapping plans to pave roads to the Galilee and to the Negev.
Another one of the nine points suggested increasing the competition in the marketplace, but in practice, Lapid avoided going after the large workers’ unions and the Histadrut labor federation. There is a good reason why, at least for now, Histadrut Chairman Ofer Eini has been crowned the big winner of the national budget, with all of its cuts.
Another point talked about “encouraging foreign investment.” What ended up happening — Lapid raised the deficit ceiling prompting credit agencies to downgrade Israel’s credit rating and consequently possibly scaring away foreign investors — doesn’t really jive with the original plan.
There is one point that Lapid did insist on, even before he became finance minister: Reducing the number of cabinet ministers. Lapid did that, but a closer look will reveal that on this point, too, he didn’t exactly live up to his word. The party platform states that “Yesh Atid will take action to terminate, among others, the Strategic Affairs Ministry, the Public Diplomacy and Diaspora Affairs Ministry (which he set out to incorporate into the Foreign Ministry’s public diplomacy department), the Negev and Galilee Development Ministry, the Senior Citizens Ministry, the Regional Cooperation Ministry, the Science and Technology Ministry and others.” In practice, Lapid did not demand the closure of any of these ministries, and indeed, none of them has been closed.
The biggest question currently being asked within the Israeli political echelon is how Prime Minister Benjamin Netanyahu will behave toward Lapid. Will the Netanyahu-Lapid model be anything like the relationship between Netanyahu and Lapid’s predecessor Yuval Steinitz, in which Netanyahu was the overseeing authority and didn’t hesitate to intervene in the finance minister’s decisions, sometimes even at the last minute? Will Lapid, like Steinitz coordinate and involve Netanyahu in every financial move? Or will Netanyahu opt for a different relationship this time — one he is very familiar with from the other side — modeled after the relationship between himself as finance minister under then-Prime Minister Ariel Sharon? In that relationship, Netanyahu had the full support of the prime minister, and his success or failure was entirely up to him and his decisions.
To this day, it seems that Netanyahu still can’t answer the question of whether serving as finance minister helped or hurt his political career. On the one hand, the election that immediately followed his term as finance minister saw him crash and burn and bring his Likud Party to an embarrassing low of 12 Knesset seats. On the other hand, merely three years later, he was already sitting in the prime minister’s seat.
Meanwhile, Netanyahu is sending out a very clear message, that he fully backs Lapid. Some suspect, however, that the relationship is founded on pure, mutual suspicion. Even though several months have gone by, the two have yet to fully recover from the election process and the harrowing coalition negotiations. The level of suspicion is still sky high.
In the vicinity of the finance minister, everyone is on the defensive lately. “Everyone is going to get hurt,” they say. “Not just the middle class. There are things that can’t be touched, like welfare, but sometimes there just isn’t any other choice. The hole needs to be plugged.”
According to the finance minister’s associates, “there are things that haven’t been addressed for years, like legislation to encourage participation in the workforce or cuts to child benefits. This reduces that blow to the middle class, but of course, it doesn’t eliminate it completely. What Lapid is doing now is a root canal. It will be deep, but quick. The subsequent national budgets will look completely different.”
Regarding Lapid’s relationship with the prime minister, they say that “Netanyahu has given his full support. Certain people are trying to say that in the end, Netanyahu will step in and not all the austerity measures will remain in place, but he never said that. It is safe to assume that the national budget will be approved by the cabinet, and it will get through all the obstacles of the cabinet and the Knesset, and the two (Lapid and Netanyahu) will still be in full cooperation with each other.”
As soon as the austerity measures were announced to the public, certain figures within the Labor Party rushed to blame party Chairwoman Shelly Yachimovich for refusing to join the coalition and declining the position of finance minister that was initially offered to her. It stands to reason that those individuals are more concerned with the ministry jobs that they themselves lost out on when Yachimovich insisted on remaining in the opposition rather than saving the Israeli economy, but as the weeks go by, it appears more and more that Yachimovich is having a hard time finding her place in the political arena.
Opposition Chairwoman Shelly Yachimovich (Labor) – Photo: Hagai Aharon
Even when it comes to economic issues, which are most identified with Yachimovich, she is failing to make herself heard. Her message simply isn’t getting through. Even now, when the public is being dealt a real economic blow with the publication of the austerity measures, Yachimovich’s economic platform sounds like something that only a few people can relate to.
On May 1, International Workers’ Day or May Day as it is known, Yachimovich made the effort to arrive at the Knesset wearing a red shirt, to show her sympathy for the workers. It didn’t take. A day earlier, the Qatari prime minister presented the new Arab League peace proposal. Yachimovich tried to express herself on the topic, but again, others’ speeches were better received than hers.
It should be said that Yachimovich doesn’t have the luxury of letting herself be left behind. In her capacity as opposition leader, she has to be second only to the prime minister in shaping the national agenda. In the meantime, however, it seems that she is not doing such a bang up job.
Yachimovich enjoys close to zero support from her fellow party members. Everyone in the party is waiting for her to decide whether she will willingly agree to hold early primaries, or whether early primaries will be legally forced on her. As of now, she is buying time.
The Knesset will be asked to approve the economic arrangements bill alongside the latest national budget. The ritual is always the same: The Finance Ministry submits a fat booklet that includes dozens of laws and revocations of laws for the Knesset to approve to meet the budget goals. Immediately everyone cries foul. The prime minister and the finance minister step in and remove some of the clauses. The booklet becomes a little thinner, and gets approved in three readings by the Knesset.
The dialogue is usually conducted between the finance minister and three important figures in the Knesset: The Knesset speaker, whose job is to protect the dignity of the legislature and ensure that the laws hiding with the economic arrangements bill are measured, transparent and as clear as possible; the chairman of the coalition, whose job is to provide the necessary majority in the committee votes and in the Knesset votes; and the chairman of the Knesset House Committee, which prepares the economic arrangements bill for the vote in the Knesset plenum.
Likud MK Yariv Levin, a member of the House Committee, suggested a four-way meeting between Lapid and Knesset Speaker Yuli Edelstein and House Committee Chairman Tzachi Hanegbi and himself. Lapid declined the invitation.
If no meeting takes place, the four will wreak havoc on the economic arrangements bill. Despite Lapid’s clarification, Edelstein is still upset about the finance minister’s recent remark that he would have a hard time giving important speeches before the Knesset, and would prefer to address the public in other forums. Edelstein may take this opportunity to teach the rookie politician Lapid a thing or two about being respectful of the Knesset.
Reuniting with Avigdor Lieberman
As he tries to put the national budget issues to rest, Netanyahu is simultaneously trying to deal with inner party problems. The prime minister has two major political plans up his sleeve: The first is to fully merge his Likud Party with partner Yisrael Beytenu, and the other is to cancel, or significantly reduce the frequency of primary elections to determine the line-up of the party’s Knesset list.
Avigdor Lieberman – YouTube screenshot
In private conversations, the prime minister has described his party and Yesh Atid as two neighboring houses. When a guest arrives at the houses, he hears yelling and mayhem coming from the first house and people singing and enjoying themselves in the second house. The choice of which door to enter is clear, Netanyahu says. The prime minister wants to instill serenity within Likud as well, and turn it into a unified party with an attractive list of quality members, all appointed by the party chairman. Just like Lapid does.
Clearly, under the current circumstances, Netanyahu’s initiative has no chance of being adopted. That is why, as a preparatory move, he has to unite with Yisrael Beytenu. Such a union will bring Yisrael Beytenu Chairman Avigdor Lieberman, Netanyahu’s ally, the power to influence a third of the votes within all Likud institutions — the Likud Central Committee, the secretariat, the faction and the party — which will allow Netanyahu to gain a majority in favor of revoking the party primaries.
Netanyahu considered advancing both these initiatives in a speedy process, but this week it was decided to postpone everything by at least a year, until after the municipal elections, which means that it will also be after the conclusion of the corruption trial currently underway against Lieberman.
The decision became public when Likud notified the district court that the party convention would not be convened before the municipal elections. Now, Likud members will be closely monitoring the Lieberman trial. The outcome of the trial will be fateful not just for Lieberman, but for them as well.
View original Israel Hayom publication at: http://www.israelhayom.com/site/newsletter_article.php?id=9207