The State Department, altering its position of last spring, asked the Congress today to increase economic supporting assistance to Israel from $50 million to $324.5 million for the current fiscal year ending June 30. John E. Murphy, deputy administrator of the Agency for International Development, at a hearing by the Subcommittee on Foreign Operations of the House Appropriations Committee, said that “since we formulated the request, significant changes have taken place in Israel’s balance of payments situation.”
He said Israel’s foreign exchange reserves had fallen by more than $800 million “due to sharply rising import prices and the internal economic pressures resulting from the heavy defense burden that must still be carried.” Israel’s foreign exchange reserves now stand at about $1billion which, Murphy said. “is barely enough to pay for two months of military and civilian imports, or roughly six months of civilian imports alone.”
He also pointed out that Israel’s balance of payments deficit has grown to about $3.5 billion. Israel’s “drastic austerity measures,” Murphy said, include the fact that some 54 percent of personal income now goes for taxes–“the highest per capita tax burden in the world.” Murphy’s position which seemed to be sympathetically received by the subcommittee headed by Rep. Otto Passman (D.La.), was endorsed by Alfred Atherton, Assistant Secretary of State for Middle Eastern Affairs.
CONTINUE AID FOR ARAB COUNTRIES
Murphy’s prepared statement also said, “We of course continue to support appropriation of the full package requested for the Middle East Arab countries.” The Congress must, by the end of this month, act on the foreign aid program, since the authorization measure adopted by the prior Congress in December, required appropriation laws to fund the allocations.
Congress had increased Israel’s authorization from $50 million to $324.5 million. The State Department had originally asked for and was authorized by the Congress to give Egypt $250 million in economic aid, Jordan $77 million and a contingency fund of $100 million was earmarked for Syria.
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