The Knesset voted early Tuesday 53-45 in favor of the first reading of Finance Minister Bezalel Smotrich’s bill increasing the deficit ceiling and defense spending in the proposed 2026 budget. The legislation will now move to the Finance Committee where it will be prepared for the two further votes it must pass in order to become law.

The bill would amend the as-yet-unpassed budget amid the war against Iran and Hezbollah by raising the deficit ceiling to 5.1 percent of GDP, up from 3.9%, and increasing the legal expenditure cap by NIS 32 billion ($10.2 billion).

It would also create a contingency reserve of up to NIS 7 billion ($2.2 billion) for security needs if war-related defense spending exceeds NIS 28 billion ($9 billion) — the amount that the government last week voted to transfer to the NIS 112 billion ($34 billion) defense budget by instituting a 3% cut across all ministries.

The coalition repeatedly postponed discussion of the bill due to threats from the ultra-Orthodox parties Shas and United Torah Judaism to vote against it. Ultimately, both parties voted........

© The Times of Israel