Israel, fighting inflation, chops military spending 15%

If ever a goverment had to contend with a powerful military-industrial complex, Israel's is it. Not quite in the sense that President Eisenhower meant in the 1950s when he alluded to the giant United States corporations that thrive on lucrative defense contracts. But in the sense that this country's job market, consumer spending, and career development depend largely on ever larger allocations for military purposes.

This was one of the underlying problems in the Dec. 22 debate between ministers and generals over whether Israel's defense spending could be cut.

The budget eventually was trimmed from $2.6 billion to $2.2 billion, virtually rejecting day-long appeals of military staff and defense ministry experts, but granting them $100 million more than Finance Minister Yigael Hurwitz's original $2.1 billion target.

This 15 percent cutback clears the way for anti-inflationary cuts in all the other ministerial budgets. The $400 million slash is the first and most urgent stage of Mr. Hurwitz's new plan to whip Israel's runaway inflation, recently pegged at 200 percent.

The problem of Mr. Hurwitz was to make the commanders of the Israeli armed forces live with his budget for them (they had asked for $3 billion). If so, he would be able to get the heads of the civilian ministers to fall into line. If not, the various ministers would have put up political barricades that probably would stop his anti-inflation plan in its tracks.

With Prime Minister Menachem Begin, who doubles as defense minister, taking a back seat during a marathon series of deiberations in his "economic Cabinet," Mr. Hurwitz seems to have won a degree of support from the minsterial majority.

This tentative show of fiscal modernation -- even when the nation's top priority (security) was at stake -- coincided with a refusal to support a Knesset (parliament) bill to annex the Golan Heights.

The later stand was not taken out of any reluctance to retain the strategic plateau taken by force of arms from Syria 13 years ago, but for a plainly political reason. It was unwillingness to line up behind an ambitious nationalist faction that sponsored the Golan legislation -- the Tehiya (Renaissance) Party of fiery Mrs. Geula Cohen and passionate novelist Moshe Shamir.

Although Mr. Begin himself did not disclose his position on the proposed Golan law, his Cabinet preferred to refrain from a repeat performance of its support for the recent law declaring the entire city of Jerusalem to be Israel's eternal capital.

Evidently the ruling Likud Party coalition that includes an influential contingent from the equally hawkish National Religious Party did not want the Cohen-Shamir party of two to appear as the sole standard bearers of militant Zionism on the eve of an election year.

The Tehiya deputies promptly withdrew their Golan Heights motion for the time being --vor by Mr. Hurwitz and Agriculture Minister Ariel Sharon. Tehiya may try another legislative tack, perhaps along the lines of a consensus in favor of continued Israeli control over the intensively-settled Golan area.

Actually, leaders of the Jewish settlement lobby seeking annexation interpreted the Cabinet move as an important step in their direction. Their assumption was that hawks from the opposition Labor Party would join a pro-annexation boom at a later date.