U.S. Jewry Pushing Ahead with Drive to Obtain U.S. Guarantees for Loans

The American Jewish community will continue to press Congress and the Bush administration for rapid consideration of Israel’s request for $10 billion in loan guarantees, despite Secretary of State James Baker’s plea for “more time” to study it.

“The American Jewish community is fully united” in seeking the loan guarantees now, Shoshana Cardin, chairman of the Conference of Presidents of Major American Jewish Organizations, said at a news conference here Thursday.

“This is the critical item on our agenda,” she said.

Israel’s ambassador to the United States, Zalman Shoval, is expected to make a formal request for the loan guarantees at a meeting he has scheduled with Baker for 4:30 p.m. Friday.

Israel is seeking the U.S. guarantees so that it can more easily obtain $2 billion in commercial bank loans each year for the next five years. The money would be used to resettle an estimated 1 million Soviet immigrants expected to arrive in Israel during that period.

Baker asked Congress on Wednesday to give the administration “a little bit of time to review this request,” in order “to assess its impact on the peace process” in the Middle East.

That heightened fears in Israel and the American Jewish community that the administration would seek to link the loans to concessions on the peace process.

Malcolm Hoenlein, executive director of the Conference of Presidents, warned Thursday that any suggestion of linkage would be dangerous.

WILL HOLD BAKER TO HIS WORD

“If the message is that the United States is going to use whatever leverage it has to get Israel to take certain political steps, then you are strengthening the hands of those who resist the peace conference,” he told the news conference.

“We hope that Congress will reject the efforts to engage in that kind of leverage,” Hoenlein said.

Baker himself said Wednesday that he was not “drawing any linkage” between the guarantees and the Middle East peace process. But then he added: “I am not suggesting that there’s not some relationship. There will be an impact.”

Cardin said Thursday that the American Jewish community would hold Baker to his word.

“The secretary and the president have said to us that there will be no linkage, and I accept at face (value) the fact that they will not link it,” she said.

And in Israel, Prime Minister Yitzhak Shamir said Thursday that Baker told him in a telephone conversation this week that the United States does not support linkage between the loan guarantees and the peace process, and that the Bush administration is committed to helping Israel absorb its immigrants from the Soviet Union.

The prime minister also denied media reports Wednesday that Baker had urged him in the phone call to postpone making the request for guarantees.

Shamir and Baker are expected to discuss the issue further when the secretary of state visits Jerusalem later this month.

In Washington, the State Department announced Thursday that Baker would travel to Israel, Egypt, Jordan and Syria after visiting Mexico and the Soviet Union next week.

Meanwhile, the Conference of Presidents and the National Jewish Community Relations Advisory Council are gearing up for a massive lobbying campaign on Capitol Hill, to persuade Congress to adopt legislation authorizing the loan guarantees before the government’s 1992 fiscal year begins Oct. 1.

A MILLION LETTERS AND TELEGRAMS

The two umbrella groups have organized a National Leadership Action Day next Thursday, when some 750 Jewish activists from 40 states are expected to converge on Washington to lobby their senators and representatives on the issue.

And that is only the beginning.

“We haven’t yet begun our efforts in full force,” Hoenlein said. “We hope to have a million letters and telegrams sent to Congress and the administration over the next couple of weeks.”

Hoenlein said he feels confident that a majority of members of Congress support the loan guarantees.

But there were reports from Capitol Hill on Thursday that the administration had begun an intensive lobbying campaign of its own to convince members of Congress to back Baker’s request for a delay in considering the Israeli request.

Nevertheless, Hoenlein expressed confidence that the request would move forward. “Frankly, I think they want to move with it,” he said.

But he added cautiously, “What will happen in the course of the debate, we don’t know.” He pointed out that Congress also will be coming under intense pressure to provide the newly independent Baltic republics with special economic assistance.

One of the greatest challenges in winning both congressional and popular support for the loan guarantees continues to be educational.

The argument that the United States, with all its dire domestic needs, cannot afford to guarantee $10 billion in loans, is one Jewish leaders expect to hear from many corners.

But the argument is fallacious, according to the Conference of Presidents leaders, because providing Israel with the loan guarantees will cost American taxpayers very little, if anything.

‘NEGLIGIBLE’ COST TO U.S.

The amount that will need to be set aside in escrow to cover any loan default will be part of the foreign aid package working its way through Congress, and will have no effect on the money available for domestic programs, according to Hoenlein.

That amount is a percentage of the sum of the guaranteed loans and is determined on the basis of the risk involved.

In the case of Israel, which has never defaulted on any loan, the amount required for escrow is expected to be between 2 percent and 8 percent, Hoenlein said, considerably less than some of the figures cited in recent press accounts.

The cost of administering the loan guarantees, an amount Hoenlein called “negligible,” would ordinarily be paid by the United States, but could be one of the elements negotiated with Israel, he said.

(JTA correspondents Gil Sedan in Jerusalem and Howard Rosenberg in Washington contributed to this report.)

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