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By Ze'ev Schiff

In the course of the eternal debates on the future of the defense budget, defense representatives suggested to the prime minister a variety of possible cuts, and requested his endorsement.

Once upon a time, Ariel Sharon was asked whether he would be willing to eliminate one division from the standing army. He rejected this idea out of hand.

On another occasion he was asked whether he would agree to reduce the number of planes in active service in the air force. Not only did he reject this idea, he responded that the number of planes in active service must be increased to its level when he was defense minister, 20 years ago. Since then, the number of planes has been reduced by about 25% - though in terms of quality, the current force is superior.

Another option that Sharon vehemently rejected was a cut in the budget for "specialty items." At one meeting, he noted that the gas masks distributed to the Israeli population are approaching expiration and said that the raw materials needed to resume gas mask production must be purchased immediately in light of the possibility of war with Iraq.

So where could cuts possibly be made?

The oft-repeated claim that we should reduce salaries, benefits and pensions for members of the standing army is bizarre. This would account for at most a few percentage points of the total cut advocated by the Finance Ministry - NIS 3 billion, in addition to canceling the increase received by the Israel Defense Forces in 2002 because of the conflict with the Palestinians.

It isn't treasury clerks who run the country. It's the government. That means that painful decisions are the government's problem.

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Just as the government determines the goals of the war, it determines how much money it can allocate to defense. The government - not the bureaucrats, for all that they consider themselves experts in everything, from the width of each new road through the number of beds needed in every hospital to the amount of ammunition and the number of days of reserve service needed by the IDF.

Incidentally, it is these same treasury whiz-kids who have always managed to prevent multi-year planning of the defense budget.

If the cabinet decides, due to American pressure, to cancel the sale of the Phalcon spy plane to China, it is also the cabinet that must decide how to compensate the Chinese. If Sharon and the cabinet decide the budget cuts must not hurt the settlers and the ultra-Orthodox, let them take responsibility and decide where else it is possible to cut and where it is not - including in the defense budget. But such a decision would require a discussion of Israel's strategic goals, of the level of deterrence it must maintain and so forth - and the cabinet has never held such a discussion.

Sharon's attitude toward the large cuts proposed for the 2003 budget as a whole is a riddle.

If they are approved, he will become the first Israeli prime minister to hit large sections of the public in their pocketbooks during an election year. And if he also accedes to the treasury's demand for deep cuts in the defense budget - in the midst of a military conflict in which he wants to defeat the Palestinian enemy - he will also be endangering what he sees as the necessary continuation of the war during an election year.

This is equally true of Finance Minister Silvan Shalom, who is considered an extreme hawk with regard to the goals of the war. But the treasury insists that Sharon has no choice in light of the economic situation.

The catch-22 is that without a drastic improvement in the security situation, there is no chance for renewed economic growth - yet if we become embroiled in an economic crisis, we will have trouble maintaining a large army and the conduct of the war will be impaired. It is clear that a stable economy is the key to military capability, but a stable security front is equally essential for economic growth.

The prime minister and his finance minister understand that no war can be waged without cost. But they don't seem to understand that the solution lies in a genuine diplomatic agreement.

There is no chance that the massive cut the treasury is demanding in the defense budget will materialize; the prime minister will not permit it. Instead, there will be a substantial change in the budget-cut proposal. The most likely result is that the government will levy a special defense tax on the public. But as for the 2003 budget cut as a whole - that remains a riddle.