Lebanese workers thronged the streets on Thursday in response to union calls for a general strike to protest against a seven-year pay freeze.
The prime minister insists no more money is available
The action suspended flights out of Beirut airport for seven hours, while most public transport staff stayed home and companies and government offices were closed.
The strikers congregated outside the cabinet offices, where the government was debating the 2004 budget, carrying banners with slogans such as "workers. farmers and teachers say no to hunger".
Lebanon is facing crippling public debts of more than $32bn, amid bickering between ministers and factions which has slowed the pace of privatisation and cost-cutting to a crawl.
The budget for next year has little room for extra social spending, and raises value added tax for the second time in three years.
The unions and some political parties are calling for lower taxes and more welfare spending in the face of unemployment which tops 20%.
They say more transparent accounting in government would pay for the changes.
Leaders of the General Labour Confederation (CGTL) point out that the government owes 270bn Lebanese pounds ($180m; £105m) to the welfare system already, and warn that maternity and sickness benefit would have to stop at the end of the year unless the deficit were paid.
"Political squabbling within the government is nothing but an excuse to fill their friends' pockets at our expense," one striking taxi driver told Agence France-Press.
Prime Minister Rafik Hariri said he sympathised with the strikers' demands.
But he said cutting spending was the only way to tackle the tattered economy, and warned that ministers were still trying to tack on extra spending which would inflate the budget deficit beyond its present sky-high 37%.