Sociologists commonly adopt a bifurcated understanding of the neoliberal state, showing how neoliberalism’s advance coincides with the growing authority of specific actors and ideas inside the bureaucratic state as others’ authority declines. This article complicates this view by probing the dynamics of non-neoliberal action inside the state, demonstrating the ways even demoted state actors can strategically muster power resources to forward distinct policy agendas. Taking a long-term perspective on social policy developments since the early 2000s, this article reviews the case of Israel, where neoliberal policies' new hegemony and adverse outcomes triggered counter-actions inside the state, ultimately leading to policy change. Paying particular attention to the role of ideas, this article argues that by rearticulating their policy mission to align with market conventions, non-neoliberal actors were able to persuade neoliberal actors to support their policy proposals, succeeding to advance creative policy alternatives under hostile political conditions. Highlighting this strategic capacity and ideational resilience and acumen in adapting to neoliberal critique reveals how demoted state actors can manage to sustain entrenched organizational goals and institutional motivations even as they help ease the adaptation of their historical mission to the neoliberal zeitgeist.