Netanyahu Proposes Defense Budget Hike Amid Political Maneuvering

Prime Minister Benjamin Netanyahu has proposed a significant increase of approximately 40 billion shekels to Israel's defense budget for 2026. This proposal, however, has raised concerns within the Knesset that it may also encompass additional civilian expenditures, including funding for settlements, yeshivas, and non-essential ministries. The Prime Minister has sought the support of opposition leader Yair Lapid for this increase, which he wishes to pass as a separate law. While Netanyahu's coalition holds a sufficient majority to pass legislation formally, procedural hurdles exist due to the Knesset being in recess.

Lapid has expressed support for bolstering the defense budget but has demanded a reduction in coalition spending and state funding for draft dodgers. The opposition is willing to convene the Knesset's finance committee if the bill is solely defense-related, but opposes including political allocations for yeshivas, settlements, and other ministries. The challenge lies in convening the finance committee during recess, which requires the consent of a special committee comprising both coalition and opposition members.

It is speculated that Netanyahu's outreach to Lapid is an attempt to navigate this procedural obstacle, potentially linking defense budget approval with consent for additional political spending. However, the coalition may attempt to bypass opposition objections. Knesset Speaker Amir Ohana has the authority to declare an exceptional situation and permit the finance committee to convene during recess, a precedent set in early August 2026 when he allowed the committee to approve coalition transfers despite opposition. Such political payments could face legal challenges from the Supreme Court of Justice (Bagatz), similar to approximately 400 million shekels in previously approved transfers.

Implementing the defense budget increase would necessitate a new budget law, raising the state spending ceiling, revising long-term financial forecasts, and adjusting the deficit target. Funding these additions might require budget cuts elsewhere, tax increases, or a higher deficit. Meanwhile, a separate request for 11.7 billion shekels for the defense system from the budget reserve has been pending for over a month, with the finance committee chairman yet to schedule a meeting. Some committee members have lost their electoral list placements, potentially complicating future votes.

Details of the defense spending increase will be presented to a closed defense budget subcommittee, which does not require opposition consent for convening. The Prime Minister's initiative is also seen as a move to secure votes from religious Zionist constituents, as the Likud party fears losing support to rival parties. Both Likud and Yesh Atid are accusing each other of delaying the defense budget increase, using the security issue for electoral advantage.