U.S. Grants and Credits to Israel Will Exceed $6 Billion in 1994

By Ella Bancroft

When Yitzhak Rabin visited Washington shortly after Bill Clinton's inauguration, the newly elected U.S. president assured the Israeli prime minister that U. S. aid to Israel in the upcoming 1994 fiscal year would not dip below the record 1993 level.

In October 1993, however, in accordance with a congressional requirement, the United States was informed by Israel that it had spent $437 million during the 1993 fiscal year (Oct. 1, 1992-Sept. 30 1993) in direct Israeli government support for Jewish settlements in the Israeli-occupied territories. Because these territories eventually will go back to the Palestinians in a land-for-peace settlement based upon U.N. Security Council Resolution 242, which the U.S. government supports, the administration is mandated by Congress to deduct one dollar from Israel's $2 billion in U.S. government loan guarantees for 1994 for every dollar the Israeli government spends in this manner in the preceding fiscal year.

Replacing the Settlement Deduction However, State Department Middle East peace talks coordinator Dennis Ross immediately let the Israelis know that the U.S. would find a way to restore the entire mandated reduction to Israel. The promise was kept in November, during another Rabin visit, when Clinton announced the U. S. would give Israel an extra $500 million to pay the costs of "redeployment" of Israeli troops from U.S. weapons stockpile in Israel," and the transfer by the U.S. government of fuel oil and fuel tanks valued at $180 million for creation of a petroleum reserve in Israel.

The manner in which these items put real U.S. aid to Israel well past the $6 billion mark is tabulated in the chart below:

Gaza and Jericho, although no agreement had been reached with the Palestinians at that point as to how complete the redeployment would be, or even when it would take place.

Last Sept. 27, as a House and Senate conference committee labored to put the final touches on the 1994 foreign aid appropriation, the committee was careful to leave in place Senate and House "earmarks" that would assure Israel the same $1.8 in military aid and $1.2 billion in economic aid in 1994 from that appropriation that it had received in 1993, despite a significant cut from the previous year's worldwide foreign aid total. (See "Congress" on page 17 of this issue.)

Why the inordinate haste by Clinton administration officials and by both houses of Congress to assure Israel that, regardless of the law, it would be taking no cuts? And why does Rabin keep coming back to Washington for more of these assurances?

The answer is that Israel received in 1993 $6.3 billion in U.S. taxpayer grants and credits, as documented in the accompanying chart. This is a much higher total than ever has been announced from the floor of either house of Congress, and a higher figure than ever has appeared in the mainstream American press, which usually reports only that Israel receives "in excess of $3 billion" in annual U.S. aid. Given the unwillingness of anyone in the Clinton administration to admit how much went to Israel in 1993, it is understandable that the Israelis keep seeking reassurance that this same astronomical sum will be made available to them again in 1994.

In a ground-breaking article in the March 1993 issue of the Washington Report on Middle East Affairs, Middle East specialist Frank Collins compiled a list of items that nearly doubled the announced total of U.S. aid to Israel. He based his article on items reported during the previous six months in the Congressional Record and confirmed by the Congressional Research Service.

Among the 1993 items made available to Israel but not included in the FY '93 budget were $700 million for the "draw-down of U.S. weapons in Europe for transfer to Israel, creation of a $300 million

In FY 1994, the outlines, if not all of the details, already are clear. In accordance with the "earmarks," Israel will receive $3 billion in direct foreign aid. Israel's loan guarantees will be reduced from $2 billion to $1.563 billion, but $500 million will be added to Israeli military aid to cover redeployment costs. Many other items were approved by Congress in a last-minute scramble by individual members to get credit with Israel's powerful U.S. Lobby in an election year.

Double Dipping for Refugee Aid

Among them are $80 million for Israel to absorb refugees from Ethiopia and the former Soviet Union (which, incidentally, was the original rationale for the annual $2 billion in loan guarantees to Israel), Pentagon funding for the joint U.S. -Israel Arrow anti-ballistic missile, the joint U.S./Israel Short Range Unmanned Aerial Vehicle (UAV) an Israeli Night Targeting System for Cobra helicopters, and other Israeli military research and development and military production programs.

In addition to such add-one for Israel in the Defense Department budget, as additional items turn up in the budgets of other U.S. government departments and agencies it is clear that President Clinton's vow that there will be no reduction in U. S. aid to Israel in 1994 is being kept. In fact, it is possible that total assistance to Israel in FY 1994 may actually exceed the $6.321 Israel was provided in U.S. taxpayer grants and credits for the 1993 fiscal year.

Ella Bancroft covers Middle East affairs from the United States.