The economic battle is part of what prompted Mr. Khamenei this week to appoint a special committee to mediate between parliament and Mr. Ahmadinejad.
Parliamentarians say the government faces a budget deficit and couldn’t pay the cash subsidies promised to the public. These members contended the government had illegally shifted money from other funds—mainly development projects such as a South Pars gas field and loans from the country’s Central Bank—to pay the cash payments. The allegations appeared on the Khabaronline website, which belongs to the powerful speaker of parliament, Ali Larijani, a leading opponent of the president.
Hamid Reza Katouzian, a conservative lawmaker from Mr. Ahmadinejad’s political party, said this month that the government’s actions were unacceptable. “Currently our national resources are going to waste because we are shutting down important projects to make cash payments to the public,” Mr. Katouzian said, according to Iranian media reports.
Senior Iranian officials in recent months have denied any financial shortages, saying the government’s foreign-exchange reserves had risen to $100 billion and nonoil exports were up 24% from a year earlier. “We are determined to continue with the reforms,” said Iran’s economics minister, Shamseddin Hosseini, during an April press briefing in Washington.
The budget for Iran’s fiscal year ending March 2012 predicted the government would save $53 bil…
