Kissinger Denies Report Israel Would Wind Up with $500 M Surplus As a Result of Getting $2.3 B in U.

Secretary of State Henry A. Kissinger today flatly denied a report that if Israel receives the $2.3 billion in U.S. military and economic assistance recommended to Congress by the Ford Administration it would end up with a balanced budget and a $500 million surplus.

Replying to questions at a State Department press conference, Kissinger declared that he was “not familiar” with an alleged secret study of Israel’s economy by the CIA which purportedly showed that Israel’s requests for U.S. assistance were “greatly inflated.”

Kissinger stated that “even at the level of $2.3 billion” of U.S. assistance. “Israel will have to engage in an austerity program in order to make ends meet.” He declared that “we have no evidence whatever” that Israel stood to gain a $500 million surplus from American aid. He pointed out, as he had done before various Congressional committees last month, that the Administration’s recommendations for aid to Israel were based on inter-departmental studies of Israel’s needs to enable it to meet its requirements.

NOT HAPPY OVER NEW GOLAN SETTLEMENTS

Kissinger said he did not want to comment on Presidential messages when he was asked today if the U.S. had called on Israeli Premier Yitzhak Rabin not to build further settlements on the Golan Heights. But the Secretary made it clear that the Administration was not happy over the Israeli decision to establish four new settlements on the Heights. “It is our general policy to oppose new settlements on the Golan Heights or elsewhere.” Kissinger said. “It complicates the diplomatic process. We have from time to time, pointed this

The alleged secret CIA report on Israel’s economy indicating that excessive demands were made on the U.S. by the Jerusalem government as its price for agreeing to the second interim pact with Egypt in Sinai last September, was the subject of a column by syndicated columnists Rowland Evans and Robert Novak which appeared today in the Washington Post and was published yesterday in the New York Post. Some observers here believe the report may have been “leaked” or “planted” by certain elements in the Administration.

TWO POSSIBLE MOTIVES FOR CIA REPORT

One view is that its purpose was to embarrass Israel and result in a reduction by Congress in the level of assistance granted that country. Another theory is that the report was deliberately intended to put Israel in a defensive position and give Kissinger the opportunity to publicly defend Israel, as he did at today’s press conference.

According to those who hold this theory. Kissinger would thereby strengthen his position in inducing Israel to place confidence in him on the issue of the Security Council’s Jan. 12 Middle East debate which Israel said it would boycott because the Palestine Liberation Organization has been invited to participate. The U.S. is making strenuous efforts to persuade Israel to reconsider its decision.

Observers here also pointed to evidence that Israel is indeed in dire economic straits. They noted the series of austerity measures being taken by the Israeli government, including the continuous devaluation of the Israel Pound; domestic belt-tightening brought about by higher taxes in Israel; and even a reduction in Israel’s military strength. In that connection, the observers noted Israeli Defense Minister Shimon Peres’ frank disclosure when he was in Washington last week that Israel intended to buy 50 F-15 jet fighters from the U.S. but when it learned their price, out the request by half to 25.

CONGRESSIONAL RESTRAINTS HURT SOVIET JEWS

Kissinger’s press conference today was largely devoted to the situation in Angola which elicited from the Secretary sharp criticism of the restraints placed by the Senate on the shipment of U.S. arms to elements in that African country fighting Soviet-backed elements. Kissinger took the occasion to warn that unless the Soviet Union showed restraint in its foreign relations, the U.S.-Soviet relationship is “bound to be more Intense.”

Kissinger also warned that the imposition of restraints by Congress on the Administration’s foreign policy activities was counter-productive. In that connection, he recalled that the U.S.-Soviet trade agreement of 1973 could not be implemented because of Congressional linkage–through the Jackson-Vanik Amendment–of Soviet emigration policies with U.S. trade benefits to that country. “It hurt the people it was intended to help.” Kissinger said, noting that Jewish emigration from the USSR was 38,000 in 1973 but only 10,000 this year.