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The Knesset Finance Committee approved the 2009-10 budget and the accompanying Economic Arrangements Bill yesterday, after a compromise with Shas cleared the way for that party's MKs to support the bills.

The bills will be brought to the plenum for their final readings next Wednesday and Thursday.

Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz had rejected Shas' original demand, for an additional NIS 200 million for the Housing and Construction Ministry. But in negotiations yesterday with Housing Minister Ariel Atias (Shas), Netanyahu and Steinitz agreed that funding for infrastructure development in national priority areas would be allocated from the general state budget instead of the Housing Ministry budget.

Knesset sources said this means that if more money is needed this purpose, it will be taken from other budgetary line items, but without increasing the overall budget.

Also yesterday, the Knesset Labor and Welfare Committee decided to remove a planned expansion of the Wisconsin welfare-to-work program from the Arrangements Bill, despite the urgings of Netanyahu, senior Finance Ministry officials and Industry, Trade and Labor Minister Benjamin Ben-Eliezer. Instead, the panel will discuss the proposed expansion at a later date.

The proposal calls for gradually expanding the program, which is designed to help the chronically unemployed reenter the work force, to additional age groups. It also stipulates that as of 2010, college graduates will no longer be eligible for the program.