Congress Adopts Foreign Aid Bill Without Loan Guarantee Provision

Congress adopted a foreign aid bill this week that contains no reference to Israel’s request for $10 billion in U.S. loan guarantees.

Instead, the Senate voted 99-1 Wednesday evening to adopt a separate, non-binding resolution calling on the Bush administration to provide an appropriate level of loan guarantees to Israel.

The senators had originally hoped to pass a foreign aid bill that contained the guarantees, which Israel would have used to obtain up to $10 billion in commercial loans to help cover the enormous cost of absorbing immigrants from the former Soviet Union and Ethiopia.

But President Bush vowed he would veto any legislation that provided the loan guarantees without requiring the Israeli government to stop building settlements in the West Bank and Gaza Strip.

So instead, both the Senate and House of Representatives passed a so-called continuing resolution that maintains last year’s level of foreign aid to Israel and other recipients for the remaining six months of the 1992 fiscal year.

The non-binding resolution, sponsored by Sen. Frank Lautenberg (D-N.J.), was as far as pro-Israel lawmakers would go in challenging President Bush’s veto threat.

Earlier this month, the Senate had proposed a compromise that would have provided Israel with loan guarantees for $850 million with no strings attached, and given the president discretion over providing guarantees for another $9 billion.

But the administration was only willing to provide Israel with guarantees for $300 million up front and wanted to place more stringent conditions on the remaining $9.7 billion.

BAKER REJECTED NEW COMPROMISE

Then last week, Sen. Howard Metzenbaum (D-Ohio) proposed a last-ditch compromise that would have had a U.S. government agency, the Overseas Private Investment Corporation, guarantee $2 billion in loans to Israel for immigrant resettlement through the 1994 fiscal year.

Metzenbaum told the Jewish Telegraphic Agency that he discussed the matter personally with Secretary of State James Baker on March 26 and got word from him on Monday that the administration “found it unacceptable.”

Baker “felt that in some way the money might be used as far as the settlements were concerned,” said Metzenbaum.

Had the administration found it acceptable, the OPIC proposal would have been included in the continuing resolution approved by the Senate on Wednesday and by the House on Tuesday, Metzenbaum said.

The Ohio senator said the loan guarantee legislation could be revisited after the Israeli elections in June or after the U.S. elections in November.

Metzenbaum said that while there were probably enough votes in the Senate and House to approve loan guarantees for Israel, it was unclear whether Congress could override the promised Bush veto.

He cited Bush’s threat to make the loan guarantees “a political issue” during the U.S. election campaign as another reason for not voting on them at this juncture.

“We don’t have the votes to override a veto,” Sen. Timothy Wirth (D-Colo.) conceded on the Senate floor Wednesday. He said he believed U.S.-Israel relations would be better off without a confrontation now than with one.

Wirth’s remarks were part of a floor debate on the loan guarantees that stretched on for five hours Wednesday, despite the fact that the sense-of-the-Senate resolution in question was entirely symbolic.

By contrast, the $14.2 billion continuing resolution on foreign aid got about an hour of attention from the Senate, which adopted it by a vote of 86-14. The House vote was 275-131.

During the loan guarantees debate, Sen. Bob Packwood (R-Ore.) unveiled eight color poster maps, dating as far back as 1000 BCE, to demonstrate that there was a Jewish presence in the West Bank as early as the time of King Solomon.

A map of the Ottoman Empire’s rule over Jerusalem from 1500 to 1919 was shown to illustrate that Jews were also allowed to settle in the West Bank then and that only between 1948 and 1967, when Jordan controlled the West Bank, were Jews not allowed to live there.

The lone vote against the loan guarantees resolution was cast by Sen. Robert Byrd (D-Va.). He argued that the United States should be “weaning Israel off foreign loans and deeper debt.”

He questioned whether the loan money would really go to immigrants. Instead, he suggested it was really an “economic infrastructure package, on top of the aid that we are already providing this year.”