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Israel delegation seeks big increase
in US. support, loan guarantees.
JAMES D. BESSER
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srael has formally requested
emergency assistance from the
United States in the form of
outright aid and huge loan
guarantees. The goal: to bolster Israel's
shrinking economy and offset some of
the costs of more than two years of
fierce fighting against Palestinian ter-
The request was made by a visiting
Israeli delegation in meetings with
administration officials this week. But
while the Bush administration is lis-
tening, all signs point to a long, ardu-
ous debate ahead — and to a signifi-
cantly reduced bottom line when the
Despite the dramatic warming in
U.S.-Israel relations since the 1991
loan guarantee battle, the administra-
tion has sent unmistakable signals that
it will use any new aid as a lever to
affect Israeli policy, especially in the
always-controversial area of settle-
ments. And the Israeli government has
already signaled back that it won't
fight strings on new loan guarantees,
as long as they aren't too stringent.
"The level of cooperation and coor-
dination between the United States
and Israel is the highest in memory,"
said Malcolm Hoenlein, executive
vice-chair of the Conference of
Presidents of Major American Jewish
Organizations. "But in areas where
there have been concerns in the past,
they are talking about some condition-
At the top of the list of conditions:
strict accounting procedures to make
sure the added U.S. dollars are not
used in the Palestinian territories.
Americans for Peace Now wants the
administration to go further. Debra
DeLee, the group's CEO, said that
while the costs of fighting terrorism
and Israel's economic problems justify
the extra aid, "the new loan guarantees
should be provided with conditions
that compel Israel to finally stop set-
In a comprehensive proposal on aid,
the group also suggested that 20 per-
cent of the loan guarantee money be
set aside for construction of housing
for settlers who want to relocate inside
Israel. There are no signs the Bush
administration is ready to go that far.
Still, it is inevitable there will be
strings attached to any new aid, said
Jess Hordes, Washington director for
the Anti-Defamation League. "There's
never a free lunch when it comes to
foreign aid programs," he said.
"The exact conditions are still very
open to question. But there will defi-
nitely be collateral questions of how
the aid is being used."
Even with congressional support for
Israel at record levels, any new aid
package will be a tough sell in a •
Congress that faces a surging budget
deficit, soaring defense costs and vot-
ers who may see popular domestic
programs slashed to the bone.
ADL's Jess Hordes said, "We're in a
very difficult fiscal and budgetary situ-
ation; the prime obstacle won't be as
much a policy issue as a budget issue.
That doesn't make it any easier."
Nor will the huge numbers invol-
ved. Israeli sources say the overall aid
request will include $4 billion in out-
right military aid and $8 billion in
loan guarantees aimed at helping the
foundering Israeli economy. The $12
billion package would be spread over
• Hordes said loan guarantees have a
minimal impact on the U.S. budget
numbers; during the last round of
guarantees in the 1990s, Israel picked
up the administrative costs of the
guarantees, so the net budgetary
impact was very small.
But the political dilemma facing
lawmakers is more formidable. "In
terms of perception, you're talking
about very big numbers," Hordes said.
With ordinary.Americans facing cuts
.in popular domestic programs, even
the appearance of big new foreign
spending carries political risks for law-
Pro-Israel activists say if the admin-
istration decides to bring a new Israel
aid program to Congress, it will be
packaged as anti-terror assistance and
assistance related to the expected U.S.
war against Iraq. And it will probably
be part of a big regional package of
assistance to U.S. allies, although