Netanyahu Seeks Budget Boost for Defense; Lapid Demands Cuts to Coalition Funds

Prime Minister Benjamin Netanyahu has requested the support of opposition leader Yair Lapid for legislation to increase Israel's defense budget. The proposal, discussed during a security briefing between the two leaders, aims to raise the defense budget by approximately 350 to 400 billion shekels over a ten-year period. Implementing this increase would necessitate a new budget law to raise the spending ceiling, adjust the "numerator" (likely referring to economic growth targets), and revise the deficit target. Funding such an expansion would require budget cuts, tax increases, and a higher deficit goal.

Netanyahu was joined in the meeting by the head of the IDF Planning Directorate and the National Security Advisor. Lapid expressed his willingness to support a defense budget increase, emphasizing the need to strengthen the IDF. However, he stipulated that the funding should not come from tax hikes on the middle class and reservists. Instead, Lapid proposed canceling "corrupt coalition funds" and the billions allocated to fund the ultra-Orthodox exemption from military service, stating that such measures would secure opposition support.

Despite Lapid's conditional support, the opposition generally opposes a ten-year defense budget increase. Consequently, it is possible that the proposal will be scaled back to a roughly 40 billion shekel increase for the defense budget specifically for the year 2026.