Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak are scheduled to reach an agreement over the weekend in New York on the cuts in the defense budget for 2012 and for later years.

In addition, the two are supposed to settle the issue of increasing the transparency of the defense allocations and increasing the Finance Ministry's surpervision of defense spending.

Netanyahu approved an agreement Tuesday evening before taking off for the U.S., which state the defense budget will be cut by NIS 3 billion a year, starting next year.

The treasury was extremely pleased with the deal Netanyahu approved this week - and not just because it frees up money to implement the recommendations of the Trajtenberg committee on socioeconomic change. Even more significantly, it will be the first time the Finance Ministry is able to supervise military salaries and other expenditures, which the treasury says will save huge sums in the future.