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Panel Refuses To Alter U.S. Aid

By Tom Raum, Associated Press Writer, 12:35 PM ET 07/14/1999


WASHINGTON (AP) _ A House panel today rejected an attempt to alter the formula for distributing foreign aid, keeping a system that has allowed Israel to get its money all at once while parceling it out to Egypt.

That system is ``stupid foreign policy,'' said Rep. Sonny Callahan, R-Ala., chairman of the House Appropriations subcommittee on foreign operations.

However, his effort to change the formula to end the upfront payments to Israel was rejected by the subcommittee, which instead adopted by voice vote a proposal to revert to the older system.

Supporters of keeping the status quo said this was not the time to change the formula to Israel's disadvantage, particularly as the Mideast peace process seems to be getting back on track and Israel's new prime minister, Ehud Barak, was on his way to Washington.

``We have an obligation in dealing with the Middle East to first do no harm,'' said Rep. David Obey, D-Wis.

The debate occurred on a $12.8 billion foreign aid bill, which the subcommittee later approved unanimously. The full Appropriations Committee will consider the legislation next week.

The bill provides $960 million in economic assistance and $1.9 billion in military assistance for Israel in the fiscal year that begins Oct. 1. That compares to $1.1 billion in economic assistance and $1.9 billion in military assistance for Israel in the current year.

For Egypt, the bill provides $735 million in economic assistance, down from $775 million in the current year; and $1.3 billion in military assistance, the same as now.

However, Israel gets its economic assistance up front, enabling it to put the money in an interest-bearing account.

Callahan sought to change that formula, saying it made no sense to give Israel preferential treatment. Giving Israel its money up front also reduces any leverage the United States had over how the money is spent, he said. He blamed the ``Israel lobby'' for the existing formula, which has been in effect for nearly two decades.

Callahan removed the no-advance-payment provision from the legislation he presented to the subcommittee. But Reps. Joe Knollenberg, R-Mich., and Nita M. Lowey, D-N.Y., offered an amendment to restore it, and it was adopted by voice vote.

Rep. Bill Young, R-Fla., chairman of the Appropriations Committee, proposed as a middle ground of adding $25 million to Egypt's accounts to help offset the imbalance. But Callahan protested that ``two wrongs don't make a right'' and Young withdrew his proposal.

The overall bill has drawn a veto threat from the administration because it is far below President Clinton's request for $14.6 billion.

The bill provides $200 million in economic assistance and $125 million in military assistance for Jordan.

It does not include any of the $500 million Clinton requested to carry out the 1998 Wye River peace accords, nor does it provide any funds for reconstruction in the Balkans. And it provides $725 million in aid to Russia and other former Soviet republics, some $307 million beneath Clinton's request.

Furthermore, it would withhold half the amount earmarked for Russia ``unless it ends nuclear and ballistic missile cooperation with Iran.''



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