Why Republicans Have Put Cuts In Aid To Israel "Off the Table"

By Ruth E. Steele

"Foreign aid is going to get cut [but] we think there's a very good chance Israel's aid will be protected, at least for the next few years. By reacting so publicly, some elements of the Jewish community have made our job harder by drawing attention to Israel's huge slice of the total aid program."

—"Top pro-Israel Activist" quoted in New York's Queens Jewish Week, Nov. 25-Dec. 1, 1994 issue.

Israel's American lobbyists can't keep from gloating, even on the record, that after the "Republican Revolution" of last Nov. 8 and the subsequent budget-cutting frenzy, Israel's "huge slice" of U.S. foreign aid has been taken "off the table" by all players.

Exit polls in the 1992 presidential election showed that 85 percent of American Jews voted for President Bill Clinton (or, perhaps more accurately, against President George Bush). Before and since then Clinton has made no secret of his commitment to Israel. Forced by law to deduct one dollar from loan guarantees to Israel for every dollar that the Israeli government spends on Jewish settlements in the occupied territories, the U.S. president has complied with the law, but then found ways to restore to Israel most of the money deducted.

The State Department estimated that Israel had spent $437 million on settlements in the 1993 fiscal year. The U.S. duly deducted $437 million from loan guarantees to Israel in the 1994 fiscal year. But the U.S. then authorized Israel to draw during 1994 an additional $500 million in U.S. military supplies from NATO warehouses in Europe.

When the State Department reported that Israel had spent $311.8 million on settlements in fiscal 1994, the same charade was repeated in the 1995 budget, in keeping with a promise by Clinton to Israeli Prime Minister Yitzhak Rabin that the U.S. would maintain total military and economic aid to Israel at the 1993 level through 1994 and 1995. Calculating that Israel had spent $95.8 million redeploying troops from Gaza, the U.S. deducted only $216 million from fiscal 1995 loan guarantees. Whether or where that $216 million will be restored to Israel is not clear at this writing.

The 1993 level of aid to Israel, as the accompanying box indicates, includes $4.271 in direct military and economic grant aid, and an additional $50 million in interest incurred by the U.S. because of its unique system of paying all of Israel's aid in one installment at the beginning of each fiscal year instead of in quarterly installments, as is the case with all other foreign aid recipients. The U.S. also extended to Israel in fiscal 1993 an additional $2 billion in loan guarantees, for a total of $6.321 billion in grants and loan guarantees.

The same amount in loan guarantees has been extended for each of the two subsequent fiscal years, minus the deductions for settlement expenditures. The Israelis are spreading the word that they "are not using the full amounts available." This is fiction. The only portions of the available loan guarantees not being used by Israel are the portions deducted as a penalty for the continued Israeli government expenditures on Jewish settlements in the occupied territories.

None of this is surprising, in view of the manner in which U.S. lobbyists for Israel and Jewish voters supported the Clinton candidacy. What is astonishing is that two key Republicans have picked up the burden, even though they now have it within their power to reduce Israel's aid for the 1996 fiscal year, which starts on Oct. 1, 1995. They are doing this despite exit polls indicating that in 1994, as in 1992, American Jews voted for Democratic candidates by margins ranging from 78 to 86 percent nationwide, according to writers for the weekly Jewish press.

Senate Foreign Relations Committee Chairman Jesse Helms (R-NC) has announced that Israel's share of U.S. foreign aid is "off the table" in making budget cuts, as is Egypt's annual $2.1 billion in foreign aid for keeping the peace for Israel. This statement is glaringly inconsistent with Helms' frequent previous suggestions, as a minority member of the Foreign Affairs Committee, that foreign aid be abolished altogether. Because he may yet set out to do this, Helms is taking steps to protect Israel's $6.321 billion by removing it from the foreign aid appropriation and placing it elsewhere in the Pentagon and State Department budgets. The rationalization would be that Israel "saves" the Pentagon money that otherwise would be needed for defense of U.S. interests in the Middle East, and that the "savings" thus could be turned over to Israel in lieu of foreign aid.

This is a highly creative idea, since Pentagon officials admit, off the record, that most unreimbursed U.S. military costs in the Middle East are incurred in preparing to defend Israel, not the other U.S. Middle Eastern allies. When U.S. forces rushed to the Middle East in 1990 and 1991 to eject the Iraqi invaders of Kuwait, the GCC countries picked up the tab for U.S. expenditures on their territories, and Saudi Arabia paid for all additional coalition military expenses, including transportation of troops and equipment to the Middle East, to the tune of $55 billion. Similarly, when U.S. forces rushed to the Middle East in the fall of 1994 in response to the deployment of Iraqi Republican Guard units toward the Kuwaiti border, GCC countries again paid the U.S. costs. By contrast, U.S. expenditures in defending Israel during the Desert Storm operation, such as the transfer to Israeli command of U.S. Patriot surface-to-air missiles, were not reimbursed. That was only one of the expensive incentives the U.S. provided Israel to keep it from entering the attack on Iraqi forces, and thereby possibly breaking up the U.S.-led coalition of Arab and Muslim states. How defending Israel "saves" Pentagon funds remains a mystery to everyone but Senator Helms.

The real explanation for his mysterious ruminations lies in the campaign by the American Israel Public Affairs Committee (AIPAC), Israel's principal Washington lobby, to prevent his re-election in 1984. Then-AIPAC Executive Director Tom Dine labeled Helms' record on legislation of interest to Israel the "worst" in the Senate. AIPAC-founded political action committees then donated a staggering $222,342 to the campaign of Helms' rival for the Senate seat, North Carolina Governor James Hunt. To counter AIPAC opposition, Helms in turn raised huge amounts from other special interests. As a result, the 1984 North Carolina race became the most expensive senatorial election campaign in national history up to that time.

After Helms squeaked through to victory, he was a changed man. He traveled to Israel with Jewish constituents, had himself photographed wearing a yarmulke at the Western (Wailing) Wall in Jerusalem, and has bombarded the media with pro-Israel statements and the Senate with pro-Israel initiatives ever since. That's why Israel's $4.321 billion in grants remains safe, but Egypt's and Jordan's U.S. aid may yet turn out to be fair game for 1996.

The loan guarantees to Israel also may be exempted from congressional cutting, based upon the Israel lobby's frequently reiterated claim that since "Israel has never defaulted on a U.S. government loan, they will cost the taxpayer nothing." The truth is that Israel has never repaid a U.S. government loan! The only reason Israel has not defaulted to date is that the U.S. Congress has forgiven virtually all U.S. government loans ever made to Israel, and the Cranston amendment attached to every foreign aid bill since 1984 provides that U.S. economic aid to Israel will never dip below the level of interest Israel owes on loans not yet forgiven.

Equally astonishing is House Speaker Newt Gingrich's (R-GA) expressed willingness to exempt "foreign aid to Middle East countries" even while he leads assaults on dozens of other politically sensitive programs. For example, the Republicans calculate that they can save more than $21 billion over five years by barring legal immigrants from 60 programs including medicaid, food stamps and welfare (illegal immigrants already are barred from most of these programs). Yet by cutting grant aid alone to Israel they could save exactly the same amount. Cutting the additional annual $2 billion in loan guarantees to Israel over the same period and applying the savings to many of the other domestic programs being reduced, such as the school lunch program, would reduce much of the heat the Republicans are feeling right now "for cutting aid to poor women and children."

At the present rate, the total of U.S. grants and loan guarantees to Israel is $17,317,808 per day, seven days a week, 52 weeks a year. One of the more drastic examples of budget cutting under consideration in Congress is shutting down the U.S. Geological Service entirely, despite the role it plays in fields as diverse as devising earthquake resistance standards for freeways, bridges and dams, and doing the basic mapping and research that supports petroleum and gas exploration and production in the United States. Yet the annual savings of $586 million from abolishing the USGS is the equivalent of less than 34 days of U.S. aid to Israel.

Gingrich would prefer to challenge any other special interest or even defy generalized voter outrage than incur the wrath of Israel's array of lobbies, PACs, support organizations and, most menacing, sycophants in the mainstream American media. He signaled his surrender to AIPAC long ago when he began taking large amounts of money, now totaling $70,912, from pro-Israel PACs. Of that total, he received $28,662 in the just completed 1993-4 election cycle.

Gingrich further agreed last August to employment of his wife, Marianne, at a salary of $2,500 a month plus commissions (the size of which she won't discuss), by a corporation headed by some of Israel's major U.S. supporters to lobby U.S. companies to participate in a free trade zone in Israel. It was yet another signal that, so far as House Speaker Gingrich is concerned, what Israel wants, Israel gets—and U.S. taxpayers get the bill.

Ruth E. Steele covers political developments in the western U.S. for American and foreign publications.