Israel's new spending plan is a win for Netanyahu
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Now, Netanyahu has much greater leeway to set his government's priorities, both at home and in the Gaza Strip, because it will be harder for any single disgruntled party in his coalition to threaten its downfall.
'That could mean doubling down on extreme right-wing populism and the war in Gaza, or it could mean figuring out an exit strategy and attempting a dash to a Saudi normalization deal,' said Michael Koplow, an analyst at Israel Policy Forum, a New York-based research group. 'But whichever path it is will reflect Netanyahu's own calculations rather than what he is being pushed into by his coalition partners.'
Netanyahu's partners were likely disinclined to break up the coalition in any case, at least for now, political analysts said. Some of his right-wing allies had seen their parties sink in the polls, while others — like the ultra-Orthodox — could struggle to find an alternative path to power despite disagreements with Netanyahu, they said.
On Wednesday, Netanyahu's coalition was already preparing its next move: Its lawmakers were set to pass a new law that would give the government greater say in the selection of Supreme Court justices. The contentious proposal has attracted fierce opposition because it is seen as part of a wider push by Netanyahu's government to exert more control over the judiciary and other state watchdogs.
The budget vote drew sharp protests from demonstrators, who blocked roads to the parliament, holding signs to demand that Netanyahu move more quickly in negotiations to free several dozen hostages who have been held in Gaza for nearly 18 months. Talks to resume a cease-fire with Hamas appear stalled, and a recent government decision to return to war is raising fears among Israelis for the hostages who have not been released.
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Yair Lapid, the leader of Israel's parliamentary opposition, claimed the budget also included cuts to essential services like health care, welfare, and education while diverting funds to Netanyahu's right-wing coalition partners.
'The budget harms every Israeli citizen, especially working people,' Lapid said. 'Just to keep the coalition going for a few more months, it sells out the citizens of Israel.'
The budget capped program spending at $168.8 billion (the rest goes to capital and debt expenses), allocating more money — $29.9 billion — to Israel's Defense Ministry than any other government agency. Nearly 18 percent of the newly approved budget for 2025 will fund its military and defense operations.
A summary of the budget said that allocation reflected the continuing need for significant military spending since October 2023, when the Hamas-led assault that killed about 1,200 Israelis touched off the ongoing war in Gaza. Spending increased last year, the budget said, as Israel opened new fronts in Lebanon and Syria and stepped up airstrikes against Iran and Yemen.
'This is a war budget, and with God's help it will also be the victory budget,' Finance Minister Bezalel Smotrich, an ally of Netanyahu, said in a statement after the budget was approved Tuesday.
The United States, which is part of deadlocked peace negotiations to free the Israeli hostages and end the war in Gaza, has eased some of Israel's wartime expenses by supplying billions of dollars in weapons.
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Already this year, the Trump administration has bypassed Congress to allow the sales of more than $12 billion in arms to Israel over the coming decade — including $2 billion in bombs such as the 2,000-pound munition that human rights officials and advocates said had indiscriminately killed civilians in Gaza.
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