Deal May See Loan Guarantees Approved Now, but Issued Later
Menu JTA Search

Deal May See Loan Guarantees Approved Now, but Issued Later

Download PDF for this date

The Bush administration and key lawmakers are reportedly close to an agreement that would indefinitely extend the time frame under which Israel could consider conditions for receiving U.S. loan guarantees for $10 billion.

“The president has signed off on the basic outline of this deal,” said one pro-Israel lobbyist, who requested anonymity.

The agreement would not change the administration’s stated conditions on Israeli government spending for West Bank settlements. But it would relieve Congress of being perceived in an election year as an obstacle to getting the loan guarantees issue resolved.

Under the accord, which is being crafted by Sen. Patrick Leahy (D-Vt.), chairman of the Senate Appropriations subcommittee on foreign operations, Congress would approve the loan guarantees now and leave it up to the administration to work out the terms for providing them.

In turn, the administration would agree not to block Congress from approving the necessary legislation by March 31.

That date is Congress’ self-imposed deadline for adopting a foreign aid bill covering the last six months of the 1992 fiscal year.

Unless either the Leahy compromise or some other U.S.-Israeli deal is hammered out by March 31, Israel would likely have to wait until after the U.S. elections in November before Congress would approve the loan guarantees.

Two pro-Israel activists here said that Baker, at a lunch meeting Tuesday with Senate Republicans, said he was hopeful that a legislative agreement could be struck.

But at least one Jewish organizational leader expressed concern about the Leahy proposal.

Jess Hordes, Washington representative of the Anti-Defamation League, said that if the legislation “would cede full discretion to the administration to determine the terms and conditions” for the loans, it could be “adverse to Israel.”


Secretary of State James Baker made clear this week that Israel will not receive the guarantees unless it agrees to stop building in the territories.

Israel’s choices, which Baker laid out Monday in an appearance before a House Appropriations subcommittee, are to stop settlement activity completely and receive guarantees for the full $10 billion or to stop only new construction and have that total reduced by the amount of money spent each year on completing construction already begun.

Pro-Israel lobbyists said the legislative maneuver would make it possible for the Israeli government to accede to the U.S. conditions some time after June 23, when the Jewish state elects a new government.

Given Israeli election dynamics, “a change in settlement policy is fairly likely,” said one lobbyist, who said such a change could be made whether Yitzhak Shamir of Likud was re-elected prime minister or succeeded by Yitzhak Rabin of Labor.

Meanwhile, American Jewish organizational leader are complaining openly about the Baker ultimatum.

Baker is “presenting demands that Israel cannot meet,” the Conference of Presidents of Major American Jewish Organizations charged Wednesday in a statement.

Shoshana Cardin, who chairs the umbrella group of 48 organizations, said that the administration’s attempt to link the Israeli request for loan guarantees with the political issue of settlements is a reversal of its previously stated “prudent position” against such linkage.

President Bush and Secretary Baker “repeatedly asserted their opposition to linkage. They did so publicly and in meetings with the Presidents Conference,” Cardin said.

“The U.S. and Israel are in the midst of their respective democratic electoral processes, and all should be done to ensure that this humanitarian issue not be used for partisan purposes on any side,” she said.

Cardin, who was in Israel on the conference’s annual study mission, vowed that on her return to the United States, “we will make our position known once again to the public as well as to the president and secretary of state.”

“We are more resolved than ever that the issue of loan guarantees be pursued,” she said.

(JTA correspondent Michele Chabin in Jerusalem contributed to this report.)

Founding Funders

The digitization of the JTA Archive would not have been possible without the generous support of the following donors:
  • The Gottesman Fund
  • Righteous Persons Foundation
  • Charles H. Revson Foundation
  • Elisa Spungen Bildner and Robert Bildner, in honor of Norma Spungen
  • George S. Blumenthal
  • Grace and Scott Offen Charitable Fund