Magazine article Washington Report on Middle East Affairs

Bush Sweeps the Field in Loan Guarantee Confrontation

Magazine article Washington Report on Middle East Affairs

Bush Sweeps the Field in Loan Guarantee Confrontation

Article excerpt

The debate over providing upward of $10 billion in housing loan guarantees to Israel has been postponed at least until early February. The delay, which was requested by President Bush in early September because of concerns that the loan might scuttle a planned Arab-Israeli peace conference this fall, is a major defeat for the pro-Israel lobby and its congressional supporters.

Although Israel's congressional supporters are loath to admit it, the delay for the first time has linked US aid to Israeli policies, in this case the Israeli government's expressed intent to continue building settlements in the occupied territories. As Secretary of State James Baker was quoted by Reuters during a trip to Syria: "We have a right to know and a right to ask how that aid and those guarantees will be used and, of course, we would expect to ask."

Similarly, President Bush, in announcing his delay request, was quoted as saying: "We're interested in absorption aid ... and this debate will take place later on. It should take place, but this is not the time."

That time will come in early February when Congress returns to Washington, DC for the second session of the 102nd Congress. While Congress may take up the request promptly in February, there also is a chance that consideration of the loan guarantees will slip until later in the year, since, generally, few bills are passed during the early weeks of a new congressional session.

Surprising Support

President Bush's request was well received on Capitol Hill, despite traditional congressional unwillingness to cross the American Israel Public Affairs Committee (AIPAC) and other elements of Israel's US lobby. While not saying they would oppose the guarantees themselves, a number of influential congressmen backed Bush's request publicly. In particular, Sen. Patrick Leahy (D-VT), chairman of the Senate Appropriations foreign operations subcommittee, and Rep. David Obey (D-WI), chair of the House Appropriations foreign operations subcommittee, both backed the president's request. Leahy's and Obey's panels control the US foreign aid program.

In addition, newly elected House Majority Whip David Bonior (D-MI) also supported the president's request. Leahy's support was particularly important, since two of Israel's most vocal supporters, Sens. Daniel Inouye (D-HI) and Robert Kasten (R-WI), initially said they would attach an amendment backing the loan guarantees to the foreign aid appropriations legislation. To thwart their plan, Leahy quashed any further committee action on the bill for the year.

A Counterproposal

At the same time, Leahy floated a proposal of his own that may resurface next year when Congress finally debates the loan guarantees. Instead of simply giving Israel the guarantees, as the US now does with all of the $3 billion plus in foreign aid earmarked for the Jewish state, Leahy proposed attaching a key condition to this new aid: for every dollar spent by Israel on new settlements in the occupied territories, as determined by the State Department, the US would reduce its guarantees by an equal amount.

An Inability Worth Noting

The inability of the pro-Israel lobby, working with Kasten, Inouye and others, to force the guarantees on a reluctant president is worth noting. For much of September, Kasten and Inouye said they had secured the support of more than 70 senators for a proposal to provide the guarantees to Israel immediately. But the two never introduced their proposal, raising questions about how firm their support was in the first place.

A favorite tactic of the pro-Israel lobby has been to round up signatures of support from senators and representatives on letters to the president in an effort to sway public opinion and to force the administration to support their position. …

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