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November 22, 1985 - Image 38

Resource type:
Text
Publication:
The Detroit Jewish News, 1985-11-22

Disclaimer: Computer generated plain text may have errors. Read more about this.

38

MTh) EE'T
Friday, November 22, 1985 THE DETROIT JEWISH NEWS

2 EXCEPTIONAL SEMINARS

presented weekly at

29 GLAMOROUS RESORTS on:

Dr. Richard J. Woolman

I. MEDICAL, DENTAL, LEGAL
MALPRACTICE: Speakers include top

A.M.A. officers and 2 past presidents of
the Association of Trial Lawyers of
c, • America (ATLA)
, 4 IL INVESTMENT STRATEGIES AND
FINANCIAL PLANNING: featuring
Joseph E. Granville, editor and publisher
of the Granville Market Letter
For more information and our brochure call.

announces the opening
of his office

Woolman Chiropractic Center, P.C.

11 WESTERN SKI AREAS • 2 QM MED VILLAGES
SCOTTSDALE, AZ • ST. THOMAS, V.I.
1-800-354-3507 In MI (313) 354 3506

at

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1-800-982-2424 In FLA (30512312424

23030 Mooney Street
Farmington, Mithigan 48024
(313) 478-4499

4 MAWAILIDCMIONS

1-800-354-3Sur i

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SAN DIEGO • PALM SPRINGS
14300-325-7934 In CA (619) 42%330

AMERICAN EIXICAIIONAL INSTITUTE, INC.

24700 Northwestern Highway. Suite 400
Southfield. Michigan 48075

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In the Broadway Plaza

Mon.-Wed.,
Fri. & Sat. 10-6,
Thurs. till 8 p.m.

855-11730

CAPITOL REPORT

WOLF BLITZER

Looking At The Options
On U.S. Aid To Israel

Washington — There is today
increasing attention being fo-
cused in Washington on the con-
troversial and highly-sensitive
_matter of trying +r, r.tructure
Israel's existing debt to the
United States.
Israeli officials are becoming
more anxious to win such a
change, convinced that it will
offer some dramatic improve-
ment to their economic woes.
The downsides of any debt re-
scheduling or moratorium, they
insist, are worth the pluses.. Is-
rael's international commercial
market credit-worthiness may
suffer somewhat in the process
of a restructuring but that is a
price Israel is willing to pay,
given the enormity of her cur-
rent economic problems.
In this area of debt reschedul-
ing, Israel has been blessed with
a great champion in Democratic
Sen. Daniel Inouye of Hawaii,
the ranking minority member of
the Senate foreign operations
subcommittee. Sen. Inouge has
already won the support of the
chairman of that panel, Repub-
lican Sen. Robert Kasten of
Wisconsin, for the concept — al-
though given the impact on the
U.S. budget process, it is still
quite a way from becoming a
reality.
Sen. Inouye, a truly devoted
friend of Israel, wants to reduce
the interest rates on outstand-
ing U.S. loans from about 12
percent to five percent. Israel
currently owes the U.S. and
other governments some $24 bil-
lion. Its total foreign debt serv-
ice today is about $4 billion a
year. About 25 percent of that
sum goes to the United States
which, this year alone, will re-
ceive slightly more than $1 bil-
lion from Israel for the repay-
ment of previous loans."If the
repayment schedule is not
changed," Sen. Inouye said, by
the year 2020, Israel will have
paid the United States $28.897
billion in principal and inter-
est."
"I have a very simple proposal
which I've discussed with sev-
eral of my colleagues," Sen. In-
ouye recently told the B'nai
B'rith Anti-Defamation League's
National Commission. "The
interest rates in Israel's loan
portfolio range from 11 to 15
percent, all prime rates with a
weighted average of 12 percent.
My proposal would reduce this
12 percent to five.
"We have accorded this
treatment to other countries
where the economic conditions
were such that repayment would
be difficult. This amendment
would not forgive Israel its debt.
Israel would continue to repay
the interest, but at five percent,
reducing the interest charges
over the life of the existing
portfolio by $8.417 billion.
"This would make a signific-
ant impact on the economy of
this little state which would be
strengthened in its ability to
handle both emergency and
long-term economic concerns.
Just cutting interest rates to
five percent would cut Israel's
spending on debt service in half.

In turn, this would reduce the
need to borrow to finance debt
and increase the availability of
funds for defense and other es-
senti al services."
In a- -May-6- - ierter tu
leagues, however, Sens. Inouye
and Kasten referred to the cost
to U.S. taxpayers by such a pro-
posed debt rescheduling. They
estimated that Congress would
have to appropriate approx-
imately another $3.9 billion for
Israel simply to bring down the
outstanding interest rates.
But encouraged by Israeli offi-
cials, these Senators are moving
quickly toward that legislative
route and the formal introduc-
tion of amendments — to be fol-
lowed by hearings and debate
and roll calls.

1The Reagan Administration,
at this time, is clearly opposed
to the entire concept, although
their opposition could weaken if
some momentum develops on
Capitol Hill. There is considera-
ble fear in the Administration
that such a procedure for Israel
— if successfully enacted —
could serve as an expensive pre-_
cedent for other countries with
heavy debt repayment schedules
to the United States.
Egypt, for instance, is watch-
ing this scenario unfold with
great interest, convinced that it
may be next in line. It was high
on the agenda during visiting
President Hosni Mubarak's
talks with Reagan at the White
House on Sept. 23.
Since signing the peace treaty
with Israel, Egypt has benefited
significantly by winning almost
the same economic benefits from
the U.S. as Israel.
With the U.S. budget deficit
climbing dangerously, however,
Administration officials are
painfully worried about such
"budget busting" schemes and
their impact on the entire U.S.
budget process.
Israeli Embassy officials, in-
cluding Ambassador Meir
Rosenne as well as Economic
Minister Dan Helperin, fear
that a separate lobbying mission
by someone like Moshe Arens on
behalf of the Inouye proposal —
which the Israeli government
privately welcomes — would
overly upset the Administration
and prove counterproductive to
Israel in other areas.

There are other long-term pro-
posals currently being circulated
in Washington for possible as-
sistance to Israel.
Democratic Rep. Michael
Barnes of Maryland, for exam-
ple, recently wrote to the State
Department suggesting that the
U.S. government might want to
promote Employment Stock
Ownership Plans (ESOPs) in Is-
rael along the lines of a U.S.
pilot project just approved for
Central American and Carib-
bean countries. ESOPs broaden
the ownership of companies
among the workers who build
up capital equity by obtaining
shares in their companies in
addition to their salaries. Dur-

"CZ

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