Lest We Forget– Israel, ignoring and sidestepping Bush, squeezes Congress for loan guarantees

From The New York Times Archives

A bitter political fight took shape today in Washington as Israel and some of its Congressional supporters ignored President Bush’s appeal to delay a request for $10 billion in loan guarantees to help settle Soviet Jews and made clear that they would push for quick Congressional approval.

Hours before the Israeli Ambassador, Zalman Shoval, delivered the Israeli request to Secretary of State James A. Baker 3d, President Bush took the unusual step of summoning reporters into the Oval Office to announce that he would ask Congress not to act on the Israeli appeal for 120 days so that it would only be dealt with after the opening of a proposed Arab-Israeli peace conference scheduled for October. Senate Committee Divided

“It is in the best interest of the peace process and of peace itself that consideration of this absorption aid question for Israel be deferred for simply 120 days,” Mr. Bush told reporters. “And I think the American people will strongly support me in this. I’m going to fight for it because I think this is what the American people want, and I’m going to do absolutely everything I can to back those members of the United States Congress who are forward-looking in their desire to see peace.”

Although Senator Patrick J. Leahy, chairman of the Senate Appropriations Committee, which has jurisdiction over foreign aid, said Thursday that he would support the President’s request for a delay, other members of his committee indicated today that they would not, and the Democratic Congressional leadership indicated that it was still consulting with members of both houses.

In addition, the Israel lobby, the American Israel Public Affairs Committee, and a broad coalition of Jewish organizations in the United States, made clear that they too would fight the President on the issue. The loan guarantees are needed by Israel to raise funds to house and settle thousands of Soviet Jewish immigrants.

“I believe that there will be an effort to deal with this in a more expeditious manner,” said Senator Alfonse M. D’Amato, the New York Republican and a member of Mr. Leahy’s committee. “I don’t see any benefit by postponing this. If the United States support for housing for Soviet refugees damages the peace process, then something is really wrong.”

Senator Daniel Patrick Moynihan, the New York Democrat, said the Bush Administration, in demanding that Israel freeze its settlements in the occupied territories before it will grant the absorption loan guarantees, was in effect asking Israel to make a unilateral concession to the Arabs before the peace conference even begins, without demanding anything similar from the Arabs.

“I believe that our guarantee is an appropriate and humanitarian step and that it should be granted without further delay,” Mr. Moynihan said.

It will clearly be difficult for Israel’s supporters to muster the two-thirds majority they would need to override a Presidential veto of an early grant of the guarantee but interested parties on both sides of the issue were not yet prepared to rule out such a possibility.

President Bush stressed that the delay was needed because this was “no time to inflame passions” in a debate over assistance to Israel — just when Mr. Baker is trying to reach a final agreement between Israel and the Arabs over a peace conference. But it is not the passions of the Arab world that threaten to be inflamed by the Israeli request.

In the last three months of diplomacy, Secretary of State Baker managed to talk the Arab states out of making a freeze on Israeli settlement building activity a precondition for their participation in the proposed peace conference, but he was not able to talk Mr. Bush out of it, officials said.

Mr. Bush insists that he will not grant the loan guarantees sought by Israel unless the Israeli Government, which has ignored all of his previous appeals to halt settlement-building in the occupied West Bank and Gaza Strip, freezes building activity. It is in order to avoid a nasty public fight between Mr. Bush and Prime Minister Yitzhak Shamir of Israel that the Administration wants the issued deferred until after a peace conference begins. It is concerned that such a fight now would be used as an excuse by Israeli hard-liners not to attend the conference at all, Administration officials said.

“My point here is, defer discussion on all these matters now and let’s go to this conference that’s just about put together,” Mr. Bush said.

Leaders of Jewish organizations in the United States argue that Mr. Bush is saying that instead of fighting now they should fight later — when Israel won’t have the leverage of holding up an American-designed peace conference. Mr. Bush has refused to promise that after 120 days he will support the loan guarantees without any link to a halt to settlements.

“This debate will take place later on,” Mr. Bush said. “It should take place, but this is not the time for a debate which can be misunderstood, a debate that can divide.”

The debate has already begun. Administration officials insist that the Israelis brought the fight on themselves by consistently ignoring President Bush’s appeals that they halt settlement-building in the West Bank and Gaza Strip. That activity has actually increased since the last $400 million loan guarantee was granted by Washington 11 months ago. ‘An Unfortunate Mistake’

Administration officials said Mr. Bush believes that Mr. Shamir simply does not take him seriously and thinks that he can still have everything he wants: American aid, housing guarantees, no halt on settlements and a peace conference virtually entirely on Israeli terms.

Israeli leaders and leaders of Jewish organizations in the United States argue that in demanding a freeze on settlements, Mr. Bush is prejudicing himself as a co-sponsor for the peace conference by insisting that Israel make a prior committment on something that should be negotiated with the Arabs. Moreover, they argue, the best way to get any sort of freeze on settlements is through a negotiated peace with the Arabs that could result from a peace conference.

“I think this is an unfortunate mistake by this Administration, which will undermine Israel’s faith and confidence in its friend and ally as it goes down that shaky road to peace,” said Abraham H. Foxman, National Director of the Anti-Defamation League of B’nai B’rith. “It is a last minute maneuver, a last-minute curveball.”

But the National Association of Arab Americans issued a statement saying that the postponement request was fully justified, considering that “the loan guarantees would provide Israel with the funds it needs to complete colonization of the occupied territories in contravention of our foreign policy.”

The loan guarantees that Mr. Shoval requested were for $2 billion a year for five years. The United States will not actually be lending the money to Israel, only guaranteeing that Israel will pay it back.