United States Ambassador Thomas Pickering cautioned Israelis to anticipate possible cutbacks in American aid.
Speaking in Haifa Wednesday, the envoy said economic assistance to foreign countries may have to be reduced automatically if other methods fail to pare the huge federal budget deficit.
“I think the reality is that the United States is working hard, at the highest levels, to deal with this problem of its budget deficit,” Pickering said. If the outcome is not satisfactory, however, it might force an automatic reduction in overseas economic aid, on an equal basis for all recipients.
Israel, which receives $1.8 billion in U.S. economic and military grants each year, is the single largest recipient of American foreign aid.
Congress and the administration are presently meeting in efforts to reach agreement on a $23 billion budget cut from the next fiscal year. So far both sides remain at odds and if this continues the Gramm-Rudman law will force automatic across-the-board cuts in every area of federal expenditures.
If the Gramm-Rudman provision were to go into effect, this would require an $11.5 billion across-the-board cut in the U.S. defense budget and an equal cut in all other allocations, including foreign aid.
The Congressional Budget Office has estimated that this would mean a $146 million reduction in military and economic aid to Israel, while the White House’s Office of Management and Budget put the cut at $140 million.
However, if the administration and Congress reach an agreement, there is a possibility that Israel might remain unscathed.
Pickering told his audience it is still too early to say what will happen.
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