Prime Minister Netanyahu and Finance Minister Steinitz on Sunday decided to seek a deficit target of 3% to compensate for reduced state revenues due to the slowdown in European economies.
In line with the decision, the government will be asked to set a lower deficit targets in the long run: 2% by 2016, and 1.5% until 2019.
Netanyahu noted that the government will make efforts to meet the objective of reducing the debt to GDP ratio in the field of 60% in 2020.
In their recommendation of the Minister of Finance is contrary to the position of Budget Division, proposed to increase the deficit target by only 1% - 2.5%.
Prime Minister Netanyahu said that the rise in the deficit to 3% instead of raising taxes will add to the budget 15 billion.
Opposition leader Shelly Yachimovich (Labor) said the decision to raise the deficit target is a step in the right direction, but is little more than using "Tylenol" to treat a disease.
She called on Netanyahu to cancel planned budget cuts and stop the erosion of National Insurance payments.
Yacimovich warned that cuts could lead to profound degradation of Israel's health services, education and homeland security. The poor and middle class would foot the bill, she added.
MK Zahava Gal-On (Meretz), who sits on the Knesset Finance Committee, said Netanyahu's attempt to increase the deficit target is spin and manipulation intended to "dazzle the weak eyes of the public."
Netanyahu is hoping the public will "forget the fact that the economy during the reign of Netanyahu has been characterized by a collapse of social services, a rapid expansion of economic inequality, and and wanton tax benefits for the rich," she added.