Arabs feel the pinch as Israel cuts child allowances

Israel recently passed $2.7 billion in spending cuts to pay for the fight against Palestinians.

With ramshackle houses, rats scampering on paths that pass for streets, and soaring unemployment, the Arab slums of Lod look like the last place able to absorb another blow.

But because the Israeli government recently passed an emergency $2.7 billion package in spending cuts, residents and social policy analysts say the area is about to become even poorer.

The reason: big bites in Israel's social-safety net, impelled by the cost of fighting the Palestinians. The conflict was escalating sharply yesterday, as Israeli troops operated in four West Bank cities following two suicide bombings in Jerusalem that killed a total of 26 Israelis. The austerity measures include a 20 percent cut in government child allowances for Arabs and ultra-Orthodox Jews. This goes beyond the 4 percent cut planned for everyone, and comes in the wake of a 12 percent cut in all child allowances already made in February.

The Arab men playing rummy on blue tablecloths in Lod's Habash Cafe smell racism in the cuts, though the government has been careful to delineate the step as being against those who do not serve in the army. Arab men have never been drafted and hardly ever volunteer, largely because it would mean fighting other Arabs.

Leading Israeli citizens' rights groups, including the Association for Civil Rights in Israel and the National Council for the Welfare of the Child, are challenging the step in Israel's Supreme Court. The groups say that the measure discriminates against sectors of society where military service is not mandated and violates the right to human dignity and freedom – a right provided by Israel's Basic Laws.

Subhi al-Haj, a father of nine children, is one of those that will be affected. He spends a great deal of time at the cafe and says he has already been feeling the pinch of the February cut. He says he cannot work and is in a drug-rehabilitation program.

"The children ask me for things – clothes and books for school, a shirt," he says. "I won't be able to get them." The approximately $500 a month they receive in national insurance payments is his family's only income.

Hoda Abu Shihab, whose family of six lives in a two-room structure behind a door made from a wooden crate, says she does not know how the family will manage. Her husband earns $700 a month as a mechanic, not nearly enough to make ends meet. Two of her children work in the vegetable market.

Perhaps the family will now stop paying $15 a month for her children to get snacks at school, she says.

Ultra-Orthodox families are also affected by the step, but their leaders were reportedly promised compensatory funding by the government. They ended up backing the budget law.

"There is no discrimination," says Moshe Debi, spokesman for Finance Min- ister Silvan Shalom. "We are giving more to those who give the country more. Any Arabs who serve in the army will not have their allocations cut."

Jews living in peripheral, economically depressed towns, and immigrants from Ethiopia and the Soviet Union, also depend heavily on allocations and are vulnerable to other new cuts, such as new strictures on unemployment insurance, according to Shlomo Swirski, director of the Tel Aviv-based Adva Center on Equality and Social Justice in Israel.

"What is happening to the Arabs is simply a more extreme version of what is happening to the Israeli poor as a whole. It is Israel's poor people who are being made to pay for the fight against the Palestinian Authority," says Mr. Swirski.

The erosion of the safety net has sped up in light of the financial crisis linked to the confrontation with the Palestinians, but it has been under way for many years, he says. A turning point, he says, came with the weakening and financial woes of the Histadrut, the main labor federation, in the early 1990s. "The Israeli poor and working class are at the present time undefended, they have no defensive shield," he says. The once socialist Labor Party supported the recent cutbacks, including those that target Arabs, he noted.

Mr. Debi stresses that social-security payments have been trimmed but not eliminated. He says payments to the elderly remain totally intact. Moreover, the budget also hits the pocketbooks of the well-off, he says, citing a new measure eliminating a previous ceiling of social-security payments for the very wealthy.

He stresses that the cuts in government allocations are essential. "The situation had gotten out of hand. People wanted to sit at home and get money from the state instead of working. And now we are starting to make some order."