Would Israel's Budget Be Cut If It Were Officially Part of the US Government?

By George Moses

Even though the year is only a few weeks old, the prize for the largest case of sticker shock in 1991 is already locked up. Late last month Israel let it be known that the price tag for its agreement not to throw a monkey wrench into the coalition effort called Operation Desert Storm is $13 billion. That's over and above the more than $4 billion Israel gets every year anyway. Even in the big money world of American budgets, the figure was breathtaking.

The Likud hubris is understandable in light of recent history. Israel has made out extremely well at the Washington trough in recent years. Although Prime Minister Shamir rode into office on his reputation as an ex-terrorist and a hard-liner who even voted against the Camp David peace agreement with Israel, he likes to brag that material aid from America has risen steadily while he has been in power. The figures show he's right. If share of the budget is a statement of priorities, Israel has much greater clout than a lot of programs with purely domestic constituencies. With virtually no strings attached, the obvious effect of American aid is to allow Israel almost unlimited budget funds to continue its occupation and oppression of Palestinians and Lebanese.

With the unveiling of the budget for fiscal year 1992, President Bush tells us what he thinks America's priorities should be for the 12 months beginning Oct. 1, 1991. By telling us how much was spent in fiscal year 1990, he reveals how the government used its financial resources in the fiscal year that ended Sept. 30, 1990. A comparison of these outlays for fiscal year 1990 shows us how Israel actually made out behind all the political blue smoke and mirrors. These figures allow observers to place in perspective where our national resources go.

For purposes of this comparison we will use an aid to Israel figure of $4,874,210,000. That figure is the total of the $3,742,100,000 which actually flowed to Israel in FY 1989, plus the $400 million loan guarantee for housing and $700 million in defense articles authorized for transfer to Israel since the Iraqi invasion of Kuwait. Although this FY 1989 figure is now slightly outdated, it is the only complete one currently on the record. The final FY 1990 expenditures will, in any case, be no lower.

What does Israel do with this money? It makes payments of $11,000 per year to Jewish immigrants who settle across the green line. Former Israeli Prime Minister Menachem Begin called establishment of Jewish settlements in Israeli-occupied territories scheduled for return to Arab control "creating facts." Each of the individuals is intended by the Shamir government to be an obstacle to peace. Many of these illegal housing developments boast large, cheap apartments and such recreational amenities as indoor swimming pools.

The US taxpayer aid to Israel buys the military equipment used to maim and slaughter unarmed Palestinians under occupation. It helps pay for the concentration camps in which thousands of Palestinian political prisoners are kept without charge or trial.

So in a year of tough budgetary choices, what US programs received a lower financial priority than aid to Israel? The accompanying chart shows what 22 federal agencies received for each dollar going to Israel.

Military Reserve personnel are a critical part of our defense structure. For every dollar that went to Israel, we spent 95 cents for personnel costs of the reserves of all four military services combined.

The Federal Emergency Management Agency (FEMA) is the court of first resort when disasters such as Hurricane Hugo and the San Francisco earthquake strike. For every dollar given to Israel, FEMA spent 45 cents.

The United States Marine Corps is America's oldest military service and is generally the first to be called on when a quick reaction ground force is required. Yet for every dollar the US gave to Israel, the Marines received 45 cents for operations and maintenance, including training costs.

Public housing agencies and Indian housing authorities are local entities which, with federal assistance, operate low-income housing projects all over the United States. For every dollar the US government gave to Israel it spent only 45 cents on operating subsidies for these projects to improve housing for low-income Americans.

The Women, Infants and Children (WIC) Program gives food supplements to low-income pregnant, post-partum and breastfeeding women, to infants and to children. For programs such as this, the poverty level for school year 1989-90 is $12, 100 for a family of four. This compares to the direct stipend of $11,000 paid to Israeli immigrants who settle beyond the green line in addition to their other state benefits. For every dollar of US aid to Israel, the WIC program received 44 cents.

The National Science Foundation is America's leader in the undertaking of research and development projects of such a scale that only government can undertake them. For every dollar Israel received in 1989, this agency spent 37 cents.

The Health Resources and Services Administration (HRSA) funds major US health programs. For every dollar given to Israel, HRSA's programs received 33 cents.

Foster care and Adoption Assistance is provided to states to support maintenance assistance for children who must be placed outside the home, including abused children and boarder babies. For every dollar Americans sent to Israel last year, the US government provided 32 cents for these programs.

The Federal Bureau of Investigation is the primary federal law enforcement agency. For every dollar the US gave to Israel in 1989, the FBI spent 30 cents.

Head Start is one of the programs repeatedly praised by the president and one of the few to receive a substantial budget increase. It assists in preparing disadvantaged children for school. For every dollar the US gave Israel, it gave these programs 30 cents.

Vocational and Adult Education programs enable many Americans to lead productive, self-sufficient lives. For every dollar the US spent to aid Israel, it spent 27 cents on these programs.

The Centers for Disease Control attack various afflictions including AIDS and other infectious diseases, and chronic and environmental diseases. For every dollar the US gave to Israel, the Centers for Disease Control spent 21 cents.

The Small Business Administration (SBA) provides assistance to small businesses and to victims of physical disasters. For each dollar sent to Israel, the SBA spent 14 cents.

EPA Abatement Control and Compliance Programs provide funds to meet federal standards for air, water, hazardous waste and toxic substances. For each dollar the US spent on Israel last year, it spent 13 cents on these vital environmental programs.

International organizations are a cornerstone of American diplomacy. The US belongs to many, several of which it helped found, such as the UN and the Organization of American States. For each dollar the US gave to Israel, it gave 13 cents to all of these organizations combined.

The Drug Enforcement Administration is the lead agency in the world's war on drugs. For every dollar the US gave to Israel, DEA spent 11 cents.

The Occupational Safety and Health Administration (OSHA) enforces safety standards in the workplace of virtually every working American. For every US dollar that went to Israel, OSHA spent six cents.

The Equal Employment Opportunity Commission is the primary guardian against discrimination in American society. Despite EEOC's huge backlog of cases, for every dollar Israel got last year, the EEOC received 4 cents.

The Securities and Exchange Commission enforces securities laws and oversees markets critical to America's economic health. For each dollar spent by Israel, the SEC spent three cents.

Peacekeeping forces are in place around the world, including the Middle East. For every dollar the US contributed to Israel, the US gave two cents to these critical efforts.

The Minority Business Development Agency develops private market opportunities and coordinates federal minority business development programs. For every dollar the US spent on Israel, the US spent one cent on this crucial mainstreaming program.

The Newest Wrinkle

One of the problems highlighted by this comparison is the lack of a rational approach to decision-making about aid to Israel. The newest wrinkle in this budget game is the attempt to get increased aid to Israel "off budget. " By using the vehicle of loan guarantees, Israel's Washington lobby, the American Israel Public Affairs Committee (AIPAQ), and its collaborators in Congress or on the staffs of individual congress members and committees, are seeking to lower the profile of American aid to Israel.

The $10 billion loan guarantee Israel wants looks, in fact, like a huge free lunch paid for by the US taxpayers. OMB Director Richard Darman's comments explain why. "For the past two decades, outstanding federal and federally assisted credit have grown faster than nominal GNP, " Darman says. "Most loan guarantees will not default. To the extent that they do, the government holds some collateral to help offset the cost."

In the case of Israel, however, the only collateral turns out to be the full faith and credit of the US Treasury. Thus, if Israel defaults on these loans (and it has no visible means for making repayment from its own economic efforts), guess who pays the bill?

When your local Likud supporter assures you that Israel has a good credit record (based on the US pledge to raise the money to pay the annual interest on all of Israel's outstanding loans from the US) and therefore repayment of this proposed huge new increment will also be no problem, you could be excused for wondering if America's junk bond king, Michael Milken, has become Israel's new finance minister.

An Alarming Scale

The scale of this program is alarming. Darman tells us that "loan guarantee programs are scattered throughout the government. " But at $ 10 billion, the Israeli loan guarantee would be the seventh largest such guaranteed loan program, larger than those of the Export-Import Bank or the Farmer's Home Administration.

There is one other comparison to be found in the budget which does try to step back to get the long view. If US government agencies were ranked by size of budget, and aid to Israel were inserted where it would be if it were the budget of a federal agency, Israel would rank 20th out of 27. Aid to Israel is greater than the budgets of the departments of State or Commerce, the entire federal judiciary including the Supreme Court, or the entire legislative branch. (See Table 2.)

For readers still with me, congratulations. You probably know more about the US budget than some of your representatives in Congress, your governor, mayor, and representatives in state legislatures. The state and local representatives should know so that they can ask federal officials why there is federal money to do for Israel what the US government cannot do for the American states, counties and municipalities.

You very likely know more about the budget and aid to Israel than most members of Congress want their constituents to know, and perhaps want to know themselves.

However, they represent you in Washington, and it's your money they're sending to Israel. They owe you an explanation. They won't provide it, however, unless you ask for it. It's the only way to hold them accountable for dubious and expensive programs that few have the stomach to defend.

George Moses, a legislative consultant based in Washington, DC, is a former president of the National Association of Arab Americans.