Netanyahu, Lapid Clash Over State Budget Amid Security Needs

The Likud party accused opposition leader Yair Lapid of "abandoning the nation's security for political considerations" following a security briefing meeting with Prime Minister Benjamin Netanyahu. The dispute arose when Netanyahu requested Lapid's support to reopen the state budget to allocate billions more to defense. Lapid agreed in principle to strengthening the military but conditioned his support on the cancellation of coalition funds and budgets for the ultra-Orthodox sector.

Likud dismissed Lapid's claims as "baseless and false," asserting that state revenues exceeded expectations, leading to a lower-than-anticipated deficit. They argued that the defense budget could be increased without raising taxes. The party also refuted Lapid's stance on coalition funds and ultra-Orthodox budgets, stating that current allocations were unprecedentedly low and that Lapid was "cheaply" prioritizing politics over national security.

Lapid countered that the core issue was not the army's needs but the funding source. He stated his support for bolstering the IDF but insisted that the burden should not fall on the middle class or reservists through tax hikes. Instead, he proposed eliminating "corrupt coalition funds" and billions allocated to what he termed "ultra-Orthodox draft evasion" as a condition for his support.

Netanyahu's request to reopen the budget reflects growing pressure within the security establishment due to the prolonged conflict and the need for long-term military buildup. This demand aligns with Netanyahu's broader vision for a significant increase in the defense budget over the next decade to foster defense production independence. A preliminary step was taken in July with an immediate transfer of approximately 12 billion shekels to the Ministry of Defense.

The demand for budget cuts to coalition partnerships revives the debate surrounding the 2026 budget approval, which totaled around 850 billion shekels. At that time, the government faced public anger over last-minute allocations to ultra-Orthodox educational institutions and billions designated for political agreements. If Netanyahu formally reopens the budget, he faces a difficult choice: secure opposition support at the risk of alienating his ultra-Orthodox coalition partners, or impose tax burdens on the middle class and reservists while maintaining the current coalition structure.