IDF warns budget delay will force reserve, intelligence cuts beginning in September

AUGUST 29, 2026 05:53The IDF will be forced to take severe, immediate measures beginning in early September because of the Finance Ministry’s “foot-dragging” in transferring the funds, despite instructions from Prime Minister Benjamin Netanyahu, senior military officials said on Thursday. The first and most immediate measure will be a sharp reduction in reserve forces in two volatile arenas, the Northern and Southern Commands.However, officials have decided not to reduce reserve forces in the West Bank Division due to heightened tensions and security warnings in the area. The decision also follows the IDF chief of staff placing an additional division on alert in case reinforcements are needed during the holiday.The second measure, prompted by the budget shortfall and the Finance Ministry’s failure to fulfill its commitments, will be a sharp reduction in intelligence gathering across several arenas. The cuts will particularly affect the third circle, where intelligence operations require space-based capabilities and other highly expensive technological systems.The third measure involves preparing for a possible escalation with Iran and other threats in the third circle, including the Houthis in Yemen and pro-Iranian Shi’ite militias in Iraq. Such preparations require regular training and sufficient stocks of spare parts and munitions.IDF troops operate in the West Bank, August 17, 2026. (credit: IDF SPOKESPERSON UNIT)These three measures are expected to take effect next week unless the Finance Ministry complies with the prime minister’s directive. Additional cuts are also expected, primarily affecting the IDF’s force buildup, including procurement based on the General Staff’s investigations into the October 7 attacks.Failure to transfer funding will affect contracts with US production companiesA senior security official told Walla that the failure to transfer sufficient funding would result in lost contracts and production lines at US companies that manufacture munitions for Israel’s air, land, and naval forces. It would also affect the procurement of various aircraft and long-term projects involving space capabilities, air defense, equipment, ground weapons systems, and other areas.“We have not managed to find a formula that makes it possible to produce intelligence in many arenas simultaneously without a budget,” the official warned.“If they do not transfer the budget now, the next government will have 145 days to pass a new budget,” he said. “If it does not happen now, we will lose a year of work on force buildup and ongoing operations.”The criticism is directed at the Finance Ministry, which holds budget reserves and is being called on to honor existing agreements and carry out the government’s instructions. The government determined that the Defense Ministry and the IDF need NIS 40 billion over the next four months to cover funding gaps for the current year.The Finance Ministry had committed to transferring NIS 15 billion but later withdrew that commitment.Follow us on Google