Magazine article Washington Report on Middle East Affairs

Odds and Ends of 1989

Magazine article Washington Report on Middle East Affairs

Odds and Ends of 1989

Article excerpt

The lackluster first session of the 101st Congress ended in late November with a flurry of legislative activity, a surprising amount of which will have an impact on US Middle East policy.

Perhaps of greatest importance, for the second year in a row and only the second time since 1981, Congress enacted freestanding foreign aid appropriations legislation just prior to its adjournment. The $14.65 billion bill is a slight increase from last year's $14.29 billion, but significantly less than the $15.15 billion originally requested by President Bush. In addition, virtually all of the increase can be traced to a $532.8 million aid package for Poland and Hungary included in this year's foreign aid legislation.

As in years past, the two single largest accounts in the US program are the economic support fund (ESF) and the foreign military financing program, which, together, gobble up $7.9 billion, or just under 54 percent, of the entire foreign aid budget. And in keeping with longstanding tradition, Congress earmarked the lion's share of these two accounts for Israel and Egypt, with just under 66 percent of the total, or $5.15 billion, slated for these two countries.

Phrased differently, Israel and Egypt will receive more than 35 percent of all the foreign aid the US will spend worldwide in 1990. Even more revealing, Israel, with a scant .0008 percent of the world's population, is slated to get more than 20 percent, $3 billion, of 1990 US foreign aid funds.

Within the confines of the ESF program, Israel is slated to receive 37.4 percent of the total, or some $1.2 billion. Similarly, Israel will get 38.2 percent of all the funds appropriated for US military aid programs throughout the world in 1990. Equally important, as in years past, the entire $3 billion earmarked for Israel is in the form of cash and so-called forgiven loans. Another provision in the appropriations bill gives Israel the right to spend $400 million of its military aid in Israel. By comparison, all other US aid recipients must spend their military aid purchasing American-manufactured goods. This offset, which was intended as a temporary support for the Israeli aerospace industry following the cancellation of the Lavi jet fighter in 1988, has now been in the aid legislation for three straight years and has apparently become a permanent "temporary" component of Israel's foreign aid package.

While unable to boost funding for Israel outright, the pro-Israel lobby, led by the American Israel Public Affairs Committee (AIPAC) and its congressional supporters, was able to bury two additional measures in the foreign aid bill, effectively boosting the dollars doled out by the US to Israel in 1990.

One measure, which was approved initially by the Senate Appropriations Foreign Operations Subcommittee chaired by Sen. Patrick Leahy (D-VT), would allow Israel and other qualifying countries to re finance outstanding loans used to purchase military equipment from the US that have interest rates of between 8 and 10 percent. Such refinancing, which can save the borrowing countries millions of dollars in interest, was previously limited to loans carrying interest rates of greater than 10 percent. While undoubtedly a boon to the borrowing countries, this provision will deprive the US Treasury of huge sums of foregone interest at a time when budgetary constraints are forcing large cuts in many domestic programs.

A second provision pushed by AIPAC and its supporters involves the pricing of military hardware sold by the US to foreign governments. …

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