Full Breakdown
Israeli Knesset Passes First Reading of Controversial 2026 State Budget Amid Haredi Draft Law Dispute
1/29/2026, 6:05:31 AM
Key Developments in the Budget Vote
On January 28, 2026, the Israeli Knesset passed the first reading of the state budget for 2026 by a vote of 62 to 55, following a two-day delay attributed to disputes over a military draft exemption bill for ultra-Orthodox (Haredi) men. The budget, which totals approximately NIS 811.74 billion ($262 billion), includes significant allocations for defense, healthcare, and religious services. However, it faces further scrutiny and must pass two additional readings by March 31 to avoid triggering early elections.
Background of the Budget Crisis
The budget vote is critical for Prime Minister Benjamin Netanyahu's coalition, which has been unstable since July 2025 due to ongoing tensions over the Haredi draft law. This legislation aims to exempt yeshiva students from mandatory military service, a contentious issue that has led to threats from Haredi parties to withdraw support for the budget if their demands are not met. The urgency of the budget's passage is underscored by Israeli law, which mandates that if the budget is not approved by the end of March, the Knesset will automatically dissolve.
Haredi Parties' Position
The Haredi parties, specifically Shas and the Degel HaTorah faction of United Torah Judaism, indicated their support for the budget's first reading after negotiations with coalition leaders. However, they have made it clear that their continued support for subsequent readings is contingent upon the completion of the conscription law. Agudat Yisrael, another faction within United Torah Judaism, opposed the budget, citing concerns over the treatment of yeshiva students and the perceived criminalization of draft evasion.
Official Statements & Responses
Prime Minister Netanyahu expressed his hope for the budget's passage, emphasizing the need for stability in the current political climate. He stated, “We are in a very sensitive situation and I think the last thing we need right now is elections.” Finance Minister Bezalel Smotrich has also voiced frustration over the linkage between the budget and the draft law, suggesting that if the Haredi parties do not support the budget, they should initiate a bill to dissolve the Knesset.
Criticism & Opposition
Opposition leader Yair Lapid criticized the budget, labeling it a product of "corruption and shirking" and arguing that it disproportionately benefits sectors close to the government while neglecting broader public needs. Critics of the Haredi draft law argue that it fails to enforce conscription effectively and serves primarily as a political maneuver to appease Haredi interests. Legal adviser Miri Frenkel-Shor has raised concerns about the constitutionality of the draft law, advocating for amendments that would impose stricter sanctions for draft evasion.
Conflicting Reports & Gaps
While Shas and Degel HaTorah have signaled support for the budget, Agudat Yisrael's opposition raises questions about the coalition's stability moving forward. There are also discrepancies regarding the specifics of the draft law, with various factions within the Haredi community expressing differing views on its provisions and implications.
What's Next
The budget's passage through its final readings is now contingent upon the resolution of the Haredi draft law. Ongoing negotiations are expected to continue in the Knesset, with the possibility of further delays as coalition leaders seek to address the concerns of Haredi lawmakers. The political landscape remains precarious, with the looming threat of early elections if the budget is not finalized by the end of March.
