Defense Minister Amir Peretz met with Finance Minister Avraham Hirchson Sunday afternoon to discuss the 2007 state budget. Peretz said that he would give in to budgetary demands from the security establishment, but added that he would refuse to give up on coalition agreements established with the Labor party, which included the raising of minimum wage, Israel Radio reported. The defense ministry is demanding an additional NIS 25 billion, which would be used to fund the war and replenish storehouse supplies. The budget increase would be implemented by the end of 2008. The treasury said that if this demand is accepted, they would be forced to cut billions of shekels from the social and welfare budgets. Peretz acknowledged the possibility of an additional cut to the allocations for children, but emphasized that he would not agree on any budget increase for his ministry at the expense of public welfare. "The time has come that we rid ourselves of this formula. I am not prepared under any circumstances to put the elderly side by side with tanks and children next to F-16s," he said. "Our national power is based not only upon the military, but also upon society. The time has come to find alternative sources of funding, and not only place security above society." The finance minister also met with Prime Minister Olmert and Kadima faction leaders earlier in the day. Meanwhile, Defense Minister Amir Peretz said in a speech at the Nitzanei Eshkol elementary school Sunday morning that "perhaps the most important thing we would like to promise the children is that instead of working on guarding classrooms, we'll work on building new room for peace between nations and speak about new hope." Peretz came to praise students at the opening of the new school year and to see up close the security measures taken by the school - one of 15 elementary schools being guarded by the defense ministry and the Home Front Command. "I'm coming to the school we invested in keeping safe in order to give the children a sense of security. Everyone made a cooperative effort to bring the school to this point," he said. The defense minister also claimed there was no need for numerous inquiry committees - just a state inquiry commission. "Many committees won't serve the purpose for which they are being set up," he said. "Therefore, I think one committee is the appropriate thing, and if it's going to be one committee, it should be a state inquiry commission with all the [relevant] powers."