Israel Asks Strapped U.S. Taxpayers for $14 Billion—No Strings Attached

By Delinda C. Hanley

Prime Minister Ariel Sharon told newspaper editors in Tel Aviv on Dec. 5 that U.S. loan guarantees and extra aid to the tune of $14 billion will arrive “in the very near future.” The aid is unconditional, he added, and not linked to Israel’s agreement to a peace plan based on the “Bush framework.”

Israel asked Washington for $4 billion in new military aid to defray the costs of fighting Palestinians, and $10 billion inloan guarantees to help Israel recover from its worst economic recession in 25 years. This, of course, is in addition to $2.7 billion in military and economic aid and an extra $200 million for anti-terrorism assistance already included in the 2003 U.S. foreign aid bill.

At a Nov. 25 White House meeting Sharon’s chief of staff, Dov Weisglass, and other Israeli officials presented the request, first broached by Sharon during his Oct. 16 White House visit, to National Security Adviser Condoleezza Rice.

A Nov. 29 Forward article claimed that Israel’s “biggest wish-list in more than a decade” garnered few headlines here because at the time the U.S. administration and media were focused only on a possible war with Iraq and the troubled economy at home. A less disingenuous reason is that Israel’s outrageous request was withheld or buried in the U.S. media to prevent a public outcry from taxpayers.

Israeli newspapers did headline the new aid requests, however, with Ha’aretz reporting Rice’s promise of a prompt response and Sharon’s assurances of a speedy influx of U.S. aid. Sharon is banking on the extra aid to cure Israel’s economic woes in time for the Jan. 28 election.

The week before the Israelis met with Rice, the State Department announced future plans to increase aid to Israel in 2004. It intends to ask Congress for $2.16 billion in military assistance to Israel for fiscal 2004—up from a $2.1 billion 2003 request and $2.04 billion forked over in 2002. The $14 billion Israel requested on Nov. 25 would be in addition to those amounts.

A recent defense spending bill not included in the military aid mentioned above appropriates $227.5 million in funding for joint U.S.-Israeli programs, including the Arrow anti-missile defense program, the Mobile Tactical High Energy Laser, the Litening II Targeting Pod, and the Bradley Reactive Armor Tiles program.

Led by the American Israel Public Affairs Committee (AIPAC), U.S. pro-Israel organizations will do their best to lobby the 108th Congress when it convenes in January to authorize the entire additional aid package. Already AIPAC is hard at work greasing the wheels (or is it palms?) to encourage the already pliant new Congress to pass the 2003 foreign aid bill, which includes Israel’s regular annual $2.1 billion in military aid and $600 million in economic aid.

Israel’s 2003 budget allocated $420 million to maintain settlements in the occupied territories.

Israel desperately needs extra funds to deal with economic problems caused by rising military costs, increased unemployment, and severe losses in investment and tourism caused by the two-year-old Palestinian uprising against the Israeli occupation. The intifada has cost Israel’s economy close to $3.15 billion a year.

Nevertheless, despite anxiety over its ailing economy, Israel’s 2003 budget allocated $420 million to maintain settlements in the occupied territories. Labor leader Binyamin Ben-Eliezer proposed using $145 million of that money to repair Israel’s social safety net, and left Sharon’s coalition government to protest the funds flowing instead to the illegal outposts.

Most Israelis believe the settlements should be dismantled. They point to the outrageous cost—a considerable portion of Israel’s annual $9 billion defense budget—of protecting 200,000 settlers, as well as world condemnation of the illegal colonies.

Israel’s settlement policies and occupation of Palestinian land add up to an economic nightmare of Israel’s own making which it now expects the American taxpayer to solve—with no strings attached. As usual, there will be little or no public debate in this country on whether citizens want to spend their money to help Israel continue its cruel occupation.

When AIPAC pressures legislators for $10 billion in loan guarantees for Israel, it will argue that “Israel has never defaulted on a loan.” The truth is that Washington automatically “forgives” loans to Israel, so it never has to repay the money. AIPAC will also claim the extra funds are needed for Israel’s war on terrorism and preparations for a U.S. war on Iraq. One official called additional aid “a payoff for not responding to Iraq.”

This ploy worked, eventually, in 1991, when Israel was persuaded not to respond to Iraqi scud missile attacks during the Gulf war. Israel’s then-Prime Minister Yitzhak Shamir asked for $10 billion in American loan guarantees in return for his compliance. Then-President George Bush tried to tie the guarantees to a freeze on West Bank settlements. Shamir, a staunch supporter of the settlement movement, refused.

This showdown between Israel and the U.S. administration was a key issue in Israel’s 1992 elections. Israeli voters chose Labor leader Yitzhak Rabin, who promised to work with Americans for peace and cut back on settlement aid, defeating Shamir, whose intransigence over settlements had blocked substantial U.S. aid.

A High Price to Pay

On the other hand, Bush’s principled stand tying U.S. aid to a peace process and a settlement freeze may have cost him his own job. Pro-Israeli groups pressured the president to release the loan guarantees unconditionally. The elder Bush, the Nov. 29, 2002 Forward newspaper reminded readers, publicly complained that he was “one lonely little guy” beset by “powerful political forces.” In the waning days of his doomed bid for re-election, Bush withdrew his objection to the loan guarantees, and Israel received the $10 billion under his successor, President Bill Clinton.

Will George W. Bush follow his father’s principled example and tie U.S. aid and loan guarantees to Israel’s immediate withdrawal from the occupied territories, a freeze on settlements and agreement to a peace plan? If Sharon won’t follow Bush’s “roadmap” and agree to the two-state vision the president described in June, will the administration—and Congress—have the backbone to withhold any extra aid?

This would make peace a campaign issue in Israel’s January elections. Would Israeli voters re-elect Sharon if his hard-line stance on settlements and peace cost the Jewish state $14 billion in aid and loans, leading instead to continued economic disaster and insecurity? If U.S. tax dollars were withheld, would voters choose the Labor Party’s new leader, Haifa Mayor Amram Mitzna, and back his more peaceful vision of the future?

Will Americans facing economic woes of their own allow a total of $6.7 billion in military and economic aid and $10 billion in loan guarantees to pour into Israel with no strings attached?

The U.S. economy is in serious trouble as its leaders scramble to deal with a recession, massive budget deficits, bankruptcies and layoffs, a 6 percent unemployment rate, and huge defense spending outlays both at home and abroad. Facing ever-decreasing revenues, many states are financially strapped as they seek ways to pay for the homeland-security initiatives and election reforms mandated by the White House. States are running up a deficit that is expected to reach $68 billion by June 30, 2003.

The cost of improving security within the United States since Sept. 11 already has been staggering. The U.S. Customs Service cannot afford to hire the personnel it needs to beef up inspections at ports and borders. President Bush recently withheld a $3.5 billion grant to upgrade training of first responders, rescue workers, firefighters, and police officers who would be first to respond to a terrorist attack.

The Academy of Arts and Sciences Committee on International Security Studies estimates that a war in Iraq could cost $99 billion to $1.9 trillion over 10 years. The 1991 Persian Gulf War cost nearly $80 billion–only 12 percent of which was paid for by Americans.

U.S. tax dollars are badly needed at home to fight poverty and homelessness. American citizens are in critical need of increased federal support for education, housing, medical insurance and health care.

Citing “national emergency or serious economic conditions” and budget restraints, Bush limited U.S. government employees to a 3.1 percent raise in 2003—saving an estimated $13.6 billion.Federal employees, who are on the front line of efforts to protect communities from terrorists, are outraged. Is it their dollars that instead will be going to Israel?

The administration also rejected a United Airlines request for $2 billion in loan guarantees to help it stave off bankruptcy.Are loan guarantees for another country a higher priority?

Internationally, recent U.S. headlines reminded Americans that 42 million people worldwide—about 75 percent of whom live in sub-Saharan Africa—are infected with the HIV virus that causes AIDS. The scourge’s death toll is equivalent to 1,000 Sept. 11’s a year—yet the U.S. has pledged only $500 million to fight mother-child transmission of the AIDs virus. Thoughtful Americans might wonder about Washington’s priorities in proposing to grant Israel, a country of only six million people, with one of the highest per capita incomes in the world, $6.7 billion—one-third of all U.S. foreign aid and $1,116.67 per Israeli citizen.

If Americans are asked to hand over hard-earned and sorely needed tax dollars to Israel when their own economy is in shambles, they’d better be sure they get something in return. Only peace in the Middle East is worth a nearly $17 billion price tag.

Delinda C. Hanley is news editor of the Washington Report on Middle East Affairs.