Rabin Says the U.S. is Reneging on Its Promise to Provide Israel with $550 M in Transitional Aid

Premier Yitzhak Rabin last night defended Israel’s demand for the $550 million in aid from the U.S. for the transitional quarter between the end of fiscal 1976 and the start of fiscal 1977 and expressed disappointment by the U.S. “going back on its promise.” But the Premier, addressing the “Tzavta” cultural club in Tel Aviv, softened this statement by pointing out that U.S. aid to Israel from the Yom Kippur War to the start of fiscal 1977 would exceed $7 billion. He characterized the dispute over the transition quarter funding as “a difference of opinion between friends.”

But another public figure intimated last night that Israel should show the U.S. that it can stand on its own feet by dropping attempts to obtain the transitional quarter funding and raising the needed money at home. In a tough speech to the Labor Party’s Achdut Avodah faction in Tel Aviv, former Histadrut Secretary General Yitzhak Ben Aharon said the Treasury could find the money by energetically cracking down on tax evaders. He claimed that millions of un-taxed dollars were earned in Israel every year.

The left-leaning Ben Aharon’s view was supported by the rightist journalist, Dr. Herzl Rosenblum of Yediot Achronot, and by Avraham Shavit, leader of the Employers Association, thus crossing ideological lines. Rosenblum contended in an editorial today that Ben Aharon’s proposal represented the redemption “of our national honor.” But he accused the Ford Administration of breach of faith. Yeruham Meshel, Histadrut Secretary General, also said he was against continued pressure on the U.S. for the $550 million. “We should prove to them that money is not everything and that national honor means a great deal to us.”

The furor over the transitional quarter funding, currently before the U.S. Congress, came to a head this week when President Ford informed Congressional leaders that he would veto the entire foreign aid package if it included additional funds for Israel and some 50 other nations to cover the three-month gap between the two fiscal years.

PLAYS DOWN CRISIS ATMOSPHERE

Rabin claimed that the Administration had specifically promised Israel the additional funds which have been included in Israel’s national budget for the new fiscal year. He said last night that Israel’s demand was “legitimate” because Israel was entitled to expect aid from its friends.

However, Rabin played down the “crisis” atmosphere that has surrounded the transitional quarter issue. He declared that the U.S. is “essentially a genuine friend of Israel interested in our welfare and supplying us with generous amounts of military and economic assistance.” He said that “Even while we continue our efforts to obtain the promised funds and even though we are disappointed by the U.S. going back on its promises, we must remember that from Oct. 1973 to the American fiscal year in Oct. 1977 we will have received $7 billion worth of military aid.”

Continuing, Rabin stated, “Certainly there are differences between us and the U.S., but there are many more common interests that bind us and the Israel government believes in narrowing the differences and strengthening our bonds.” However, Rabin added, “this does not mean we will not speak up and voice our objections when we feel some injustice is being done to us.”

‘UNFAIR INTERFERENCE’ QUESTIONED

A “Western diplomatic source” told newsmen in Tel Aviv today that if it is true that Israel is pressuring Congress over the head of the Ford Administration to write the transitional quarter funding into the foreign aid bill, it was exerting unfair interference in American internal affairs. The source, who was also described by some as a “senior American diplomatic source,” chided the Israeli Treasury for building a budget on monies not yet received or approved.

He conceded that the failure to provide Israel with the additional $550 million would create some problems for this country but they would not be crucial ones, according to the source. The source disagreed sharply with the prognosis by Bank of Israel Governor Moshe Zanbar who contended yesterday that if Israel failed to receive the additional funding unemployment here would reach 80,000 this year. Zanbar was also taken to task by Finance Minister Yehoshua Rabinowitz for that remark.

(In Washington, the State Department today gave no support to the statement by the “Western diplomatic source,” believed by some here to be Ambassador Malcolm Toon, regarding possible pressure on Congress for the $550 million. “Quite obviously that is not our view,” John Trattner, a Department spokesman, said when he was asked about the report.)