The Political Interest Tap Israel to Help Russia

By Michael Kramer

This just in: Supporting freedom doesn't come free. Bill Clinton wants more money for Russia -- $1.8 billion in new funds beyond the $1.6 billion the President promised Boris Yeltsin in Vancouver. Where's the money going to come from?

Mostly from Congress, via an emergency appropriation, White House officials predict. But selling the idea of new foreign aid is the political equivalent of root canal. Luckily, however, an alternative exists, a reallocation of the $15 billion the U.S. sends abroad each year -- funds still distributed according to a formula established when the old world order flourished.

Trouble is, redirecting a substantial amount of foreign aid would require slicing Israel's annual $3 billion stipend, which strikes most elected officials as a prescription for political suicide. "It's not an option we're considering," Al Gore says flatly. "But it should be," says a White House aide, who hints that the Administration is "considering how and when we might step on the third rail" of foreign assistance. Jerusalem's take "may be safe this year, but that's it. Israel's going to have to take a hit sometime soon."

He's right, and here's why. Aid to Israel comes in two forms. Of the $1.8 billion in military assistance, about 70% must be spent on U.S.-made equipment and weapons. "That's untouchable," says a senior State Department official. "It creates jobs in the U.S., which in case you haven't noticed is what the Clinton Administration is supposed to be all about." The remaining $1.2 billion in economic aid is harder to justify now that Israel is flush. Foreign investment is flowing in, the growth rate is a phenomenal 6%, and the $10 billion in loan guarantees finally granted by George Bush last year has permitted Israel to borrow from private banks at favorable rates. The country is doing so well that the government has asked the Israel Bonds Organization to curtail sales; the loan guarantees are a much better way to raise capital.

In public, Israel's leaders remain apoplectic about a decline in U.S. aid. Privately, though, some Israeli politicians are dying to be asked to do their bit for the new world order. "We could take a shot and gain a lot of goodwill," says one, "but it all depends on the peace process."

So he's saying peace would make cutting aid to Israel easier, right? Wrong. It's just the opposite. "Consider the northern front," explains Ze'ev Chafets, an Israeli journalist who served as spokesman for the late Prime Minister Menachem Begin. "If we give the Golan Heights back to Syria, we'll have to build expensive new defenses close by." Never mind that Israel could finance such projects itself; the post-peace game would be played differently. "If peace happens," says Chafets, "we'll be looking for more American money, not less -- just like we got from Jimmy Carter after we made peace with Egypt."

Three years ago, Senate Republican leader Bob Dole bravely suggested reducing Israel's aid: "Can't we convince our friends . . . it is in their interest too to help insure against a failure of new democracies and free- market economies?" No one even tried. "Dole was right," says a Clinton adviser, "and the argument's going to be made again now that we want new money for Yeltsin. The question is whether we'll have the guts to make the case ourselves or whether we'll piggyback on Congress" -- assuming, of course, that Congress prefers the third rail to root canal.