Israeli Officials Gratified with U.S. Aid Package for Fiscal 1984

Israeli officials are deeply gratified over the U.S. military and economic aid package for fiscal year 1984 which the House of Representatives approved last Thursday.

It is not only the largest amount of aid ever voted for Israel but allows the Israelis to use $550 million in military credits toward building their second generation jet fighter-bomber, the Lavie, an issue which had generated controversy within the Reagan Administration and among American military aircraft manufacturers.

The Israeli officials feel the Congressional action will provide a welcome backdrop to Premier Yitzhak Shamir’s visit to Washington, scheduled for the end of this month. It will be Shamir’s first personal contact with the Administration since he succeeded Premier Menachem Begin last month. He is expected to meet with President Reagan and other top officials to discuss the rapidly improving relations between Israel and the U.S., with emphasis on future strategic cooperation.

The aid package which the House approved by a 224-189 vote totals $2.61 billion, compared to $2.48 billion in fiscal 1983. The new allocation contains $1.7 billion in military credits and $910 million in economic grants. Of the military credits, $850 million is “forgiven” — meaning it does not have to be repaid.

APPROVE MILITARY CREDITS TO DEVELOP THE LAVIE

The use of military credits to develop the Lavie was approved over the objections of Defense Secretary Caspar Weinberger who argued that the warplane would not increase Israel’s military capability but would be an economic asset inasmuch as it is designed for export. The practice up to now has been that countries receiving U.S. military credits use them to purchase American military equipment, not develop their own weapons.

The Lavie, expected to be operational in the 1990′s, will compete on foreign markets against U.S. military aircraft, such as the Northrop company’s F-20 fighter which is not financed by the government. On the other hand, American companies such as Pratt & Whitney and Grumman, which will provide key components of the Lavie, have supported the use of U.S. military credits to develop the plane.

According to the General Accounting Office in Washington, research and development costs for the Lavie are expected to exceed $1.5 billion. In addition to the aid for Israel, the House also voted last week to provide Egypt with $2.1 billion in assistance of which $1.4 billion is military credits, including a $465 million grant and $910 million in loans.

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