Magazine article Washington Report on Middle East Affairs

Special Report: How Israel Got the Loan Guarantees Opposed by 80 Percent of Americans

Magazine article Washington Report on Middle East Affairs

Special Report: How Israel Got the Loan Guarantees Opposed by 80 Percent of Americans

Article excerpt

Special Report: How Israel Got the Loan Guarantees Opposed by 80 Percent of Americans

On Oct. 5, in the closing days of the 102nd Congress of the United States, a massive amendment was tacked on to the annual appropriation for U.S. Aid and Assistance. Probably few bills or amendments during this session of Congress had as much behind-the-scenes attention and involved as much negotiation between the White House and Congress. Possibly none got less attention in the media, once they were passed. And certainly none were passed despite such widespread public opposition as that engendered by the special amendment to the Senate version of HR 5368 that provided Israel with $ 10 billion in U.S. loan guarantees.

It was passed and sent to the president for signing in the closing rush by both houses, despite the fact that polls indicated that 80 percent of Americans (in some counts of mail received by Congress it was running over 90 percent) opposed granting the loan guarantees in the face of both Israel's policies on settlements and the current U.S. deficit.

Middle East peace organizations around the country and Arab-American ethnic organizations already have vowed to monitor terms of the agreement, particularly the promised slowdown of settlement building on the West Bank. They consider it likely that Israeli private settlement building and expansion of current settlements will continue almost uninterrupted during the five-year loan guarantee period, which began Oct. 1.

Public Opposition Ignored

There was practically no discussion in Congress of the many questions that might have been asked about the ultimate cost to U.S. taxpayers of guaranteeing massive loans entirely to support the Israeli economy during its promised transition to a free market. That had become the basic justification for the loans advanced by Israel and its U.S. lobby now that Jewish emigration from the former Soviet Union is lower to Israel than to the United States.

$10,000 Per Israeli

Israel expects the $10 billion in principal and the equal amount in interest that will be Uncle Sam's maximum liability exposure under the current legislation will trigger four times that in guarantees for loans and long-term borrowing for Israel from other nations. That figures out to $10,000 in economic benefits in Israel for each of its four million Jewish citizens in residence, who are expected to be the major beneficiaries of any Israeli government programs. The 800,000 Israeli Arabs expect their lands to be confiscated for new highways and their villages to be cut off from their traditional farmlands by the largesse made available by the U.S.

Said one Israeli Arab after the vote, "We second-class citizens will . . . gain nothing from the banks to develop our sector. It is a sad day for us Israeli Arabs."

All of the money generated by the official U.S. loan guarantees of $2 billion a year are to be used within the Green Line. It will be almost impossible to verify that U.S. loan guarantees are not being used in the territories, however. Furthermore, much of the additional $40 billion in loans that Israelis expect to receive from other nations and private sources now that the U.S. has agreed to the initial $10 billion, may have no such restrictions. Some settlements in the occupied territories can proceed, particularly those "security" settlements along the Jordan and the ones in East Jerusalem, where extensive plans for expanding Jewish (but not Arab) housing remain in place.

While the amendment does establish a joint consultation process permitting the president to deduct dollar-for-dollar for any building across the Green Line, that starts only a year from now, giving Israeli Prime Minister Rabin the certainty of finishing all the housing underway now--plus any in Jerusalem that he might want to hurry along before Oct. 1, 1993--without deductions.

Special Provisions

There are other interesting provisions inserted to help the Israelis in their creeping conquest of the occupied territories: There is a 10-year grace period for repayment of any principal on the loans to be made by private banks, a highly unusual if not precedent-breaking federal intrusion into credit terms. …

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