A Frayed Social Safety Net

During the month before Pesach, all tough decisions in Israel are put on hold until “after the chagim.” These include everything from the decision to go on a diet and start an exercise program to whether to make a major purchase. For the government, which has been delaying tough decisions on the 2013 budget, “after the chagim” has arrived.

What’s clear is that there is a huge hole in the budget and that steps have to be taken now to prevent Israel from following in the path of economic basket cases like Greece and Spain. What isn’t clear is how exactly the budget will be balanced.

Will taxes be raised or government services be cut? If it’s the latter, which services will be cut, and by how much? Can defense spending — the biggest single expenditure — be slashed these days, with the unprecedented security threats from Iran, Syria and Egypt?

On the other hand, the middle class, who took to the streets last summer to protest the high cost of living, would appear to be in no position to shoulder more taxes.

Some are suggesting that the government simply raise the debt limit — in other words, decide not to decide.

There have been broad hints from the Finance Ministry, headed by Yair Lapid, that child-allocation payments are being targeted for cuts. These payments, which were already slashed in the days of then-Finance Minister Binyamin Netanyahu some 10 years ago, are viewed by capitalist–free marketeers as a crutch that should be dispensed with in order to force people to go to work.

In fact, they are a safety net, which every enlightened society provides its economically weaker segment. And failing to provide such a safety net can have devastating consequences.

Recently, a professor who specializes in socio-economic issues participated in a panel discussion on poverty. He produced figures showing that poverty in Israel is greater than that in other developed countries. Why?

Because the level of social spending — for children, the elderly, those earning below-average wages — is significantly lower than that of other countries. And this has been the declared policy of the government since Netanyahu served as finance minister.

And why, the professor was asked, does the general public put up with this steady erosion of government-provided services? Israel, after all, was always perceived as a socialist country that is generous in providing for its neediest sectors.

“We are a heterogeneous society,” the professor answered. “And there are many in the general population who are willing to forgo what is due them, in terms of allocations, if it means that the chareidim and Arabs will go without.”

As startling as the professor’s answer was, the response of the interviewer was even more amazing. Instead of expressing shock that the Israeli public is so driven by hatred that it will accept painful cuts as long the “other” suffers, the interviewer responded with a matter-of-fact “interesting.”

The problem is that there are those in the government who are aware of this attitude, and seek to take advantage of it in order to impose more painful economic measures. If slashing child allocations worked 10 years ago because the perceived victims were chareidim and Arabs, then eliminating them entirely now will work, and for the same reason.

Fortunately, there are voices that are sounding the alarm and that, hopefully, can return some semblance of social sanity to the political-economic arena. Dr. Yitzchak Kadman, the respected, long-time head of the Council for the Child, called Lapid’s plan to cut billions from child allocations a “hate crime,” as it is motivated by hatred of chareidim and Arabs.

The Association for Civil Rights (ACRI), a left-wing organization that can hardly be accused of being pro-chareidi, is urging the government to hold off on cuts to child allocations in order to study their impact, which it argues would drag another 50,000 children below the poverty line.

Cutting child allocations won’t save the government any money. To the contrary, in the long term it will cost more. A child who doesn’t receive basic nourishment at crucial points in his development will, chalilah, develop problems that the health system will have to spend huge amounts to treat. A child whose basic needs of shelter and warmth and clothing and education go unmet, requires more government assistance throughout his adult life.

To be sure, the new government has yet to approve the budget for 2013.

The Treasury’s economic teams are still meeting with those of the Prime Minister’s Office to find ways to close the gap. For this reason, there is no point is raising a hue and cry at this stage.

But we can suggest that the economists in Israel take a look around the world to see how enlightened countries provide for their needier sectors.

Enlightened governments understand that a country can’t be run like a business, where the only thing that matters is the “bottom line.” They understand that social concerns must also factor into the wide array of considerations facing decision-makers.

Most of all, they understand a balanced budget ultimately is one that balances compassion and concern for the weak and hard, economic realities.