Foreign Aid as Shell Game

There was, if you listenedcarefully, an undertone of anxiety beneath the hoopla last month,when Israel laid out plans to wean itself off U.S. economic aid.While politicians and pundits celebrated Israel’s generous offer togive up its $3 billion-a-year entitlement, some Jewish activists werequietly wondering what it would do to Jewish political clout.

“If you’re going to be one of the mostpowerful lobbying forces in Washington, it’s a good idea to havesomething to lobby for,” says one veteran Washington insider,speaking on condition of anonymity. “Right now, it feels like AIPACis the March of Dimes, and they’re about to cure polio.”

For some reason, folks at AIPAC, the AmericanIsrael Public Affairs Committee, don’t seem worried. Neither doleaders of other Jewish organizations, nor Israel’s congressionalsupporters. They’re acting as though nothing much is happening. “Thisis a success story of an aid program that worked,” says AIPACspokeswoman Toby Dershowitz. “We think this is good news.”

At first glance, the facts seem to warrant a tadmore anxiety. More than any other institution, AIPAC embodiesAmerican Jewish clout through its legendary ability to ensure U.S.support for Israel. Nothing symbolizes that U.S. support, and theJewish clout that maintains it, better than that $3 billion. As muchas Jewish power secures aid, aid builds Jewish power.

Consider the numbers. When the Nixonadministration first announced in October 1973 that it was sendingIsrael a staggering $2.2 billion, AIPAC was a shoestring agency witha half dozen staffers and a $400,000 budget. In the years since, U.S.aid has crept up to $3 billion, while AIPAC has ballooned into acolossus with a 150-member staff, a $15 million budget and asuperpower aura.

AIPAC’s aura spreads far, lending stature to otherJewish lobbying efforts. When the Anti-Defamation League lobbiesagainst hate crimes, or when the Hebrew Immigrant Aid Society seeksvisas for Russian refugees, or when Hadassah demands funding forbreast cancer research, they benefit from the perception that theyspeak for a $3 billion Jewish juggernaut.

“Pro-Israel activity on Capitol Hill creates aneffective Jewish presence in Washington that makes our work on otherissues more effective,” says Rabbi David Saperstein, head of theWashington Religious Action Center of Reform Judaism.

A Washington political consultant is more blunt:”There is a benefit to looking like Godzilla when you walk into aroom.”

So why isn’t anybody frightened about the aidgoing away? Because the aid isn’t really going away. It’s being, asJewish lobbyists politely phrase it, “reconfigured.”

Briefly put, Israel is suggesting a slow phase-outof its “economic,” or nonmilitary, assistance. That’s only $1.2billion, less than half the $3 billion yearly total. The other $1.8billion is military aid. Israel wants to increase that part.

The economic aid is easy to cut. It doesn’t doIsrael much good anyway. When it started, Israel had a Gross DomesticProduct below $20 billion a year. U.S. aid meant something. Today,Israel’s GDP is well over $80 billion. Economic aid accounts forbarely 2 percent of it.

Most of the aid doesn’t even enter Israel’seconomy. It used to build bridges and schools. Now it repays Israel’sdebt to the United States, which piled up before the aid wasconverted from loans to grants in the mid-1980s. Within 10 years, thedebt will be paid up, according to the plan proposed to Congress lastmonth by Finance Minister Yaakov Neeman (yes, that Neeman). That’swhen Israel wants to end the aid.

Israel could end economic aid right now ifWashington forgave the debt. Congress and the administration wouldprobably agree, sources say. But Jerusalem fears lowering its creditrating.

As for military aid, nobody wants to end it.Congress loves military aid. Nearly all of it comes as credits to buyU.S. arms, creating jobs and tax revenues in America. Besides,Washington recognizes that Israel faces a spiraling arms race that itcan’t afford to lose. Israel actually wants to boost military aid byone-third, to $2.4 billion.

If the plan is accepted, U.S. aid to Israel willdrop, slowly, from $3 billion to $2.4 billion. Israel will still bethe biggest U.S. aid recipient. Bold offer? It’s more like a shellgame.

And, yet, Congress is eating it up. “The financeminister came here of his own accord and said Israel is moving towardeconomic independence, and everyone is pretty happy,” says MarkCorallo, an aide to House Appropriations chairman Bob Livingston,R-La. “We stand firm on our commitment to their defense needs becauseit’s in our vital national interest. I don’t know of anyone aroundhere who is bothered by that. Everyone realizes Israel is ourstrongest ally.”

With so much benefit and so little cost, thewonder is that Israel didn’t suggest it years ago. But Jerusalem hasbeen reluctant to part with its greatest symbol of U.S. support. Evenafter Prime Minister Binyamin Netanyahu vowed to cut aid in a 1996speech to Congress, just after taking office, nothing happened.Annoyance has been building in Washington ever since, putting intensepressure on Jerusalem to get the ball rolling. Much of the pressurecame from AIPAC.

Since taking the plunge, Israelis are suddenlybasking in unaccustomed acclaim. House Republicans see a chance tocut the budget. The Congressional Black Caucus hopes to claim someextra aid for Africa. The only loser is Egypt, which has received$2.1 billion yearly since making peace with Israel, and fearsCongress is just waiting for an excuse to slash.

Everyone else is happy with Israel for a change.That makes Jewish lobbyists very happy.

“I don’t think people will see this as a sign of acommunity that’s losing clout, but of a country that’s doing better,”says Jess Hordes, head of the ADL’s Washington office. “That’s goodfor all of us.”

Maybe the anxiety we heard was Egypt’s.

J.J. Goldberg is the author of “Jewish Power:Inside the Amercan Jewish Establishment.” He writes regularly for theJewish Journal.

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