White House Seeks to Allay Fear That Allocations to Israel, Egypt Will Affect Domestic Aid Programs

The White House today sought to allay fears that the U.S. allocation of $5 billion or possibly more to Israel and Egypt to cement their peace agreement will affect federal funding of domestic welfare programs and old to unemployed Americans.

Responding to reporters questions, Presidential Press Secretary Jody Powell pointed out that the allocations are “being stretched out over three or four years.” He added that the U.S. budget has a “number of places” which could be tapped for the funds that do not bear on anti-poverty programs. Powell disagreed with a reporter who implied that the money may come out of social programs for Blacks and others. Why, he asked, is the Egyptian Israeli treaty not “in the interests of minorities” in the U.S. He said that if additional appropriations are required, we will be making recommendations for both the current budget and the upcoming 1980 budget. (Israel expressed disappointment with the amount of U.S. aid. See P. 3 for story.)

Meanwhile, Sen. William Proxmire (D. Wisc.) chairman of the Senate Banking Committee and a strong opponent of military foreign aid, continued his criticism of the U.S. commitments in connection with the Egyptian-Israeli treaty. He told the Senate that it is “a remarkable contradiction” and “self-defeating” that President Carter negotiated the peace but that “in order to button up that treaty we are going to have to agree to $5 billion of arms exports to Egypt and Israel.”

Touching on a favorite theme of many Congressmen, Proxmire said, “For us to solve our problems” by “giving more arms to bath sides is fundamentally wrong and self defeating.”

AGREEMENTS BETWEEN. U.S., ISRAEL

During the meetings between Defense Secretary Harold Brown and Israeli Defense Minister Ezer Weizman, the U.S. agreed yesterday, according to Pentagon sources, to provide $3 billion in new military aid to Israel of which $800 million will be in grants and $2.2 billion in Joans to be repaid over a 30 years period at prevailing interstates, beginning after a 10 year grace period.

This is to help Israel pay the costs of its with drawal from Sinai and to finance the construction and equipment of new air bases in the Negev under the “management supervision” of the U.S. Army Corps of Engineers, Pentagon sources said.

In addition, the sources said, the U.S. has agreed to begin delivery of 75 F-16 Fighter bombers to Israel early next year instead of October, 1981 as originally planned. Other military equipment will include M-60 tanks, armored personnel carriers, Howitzers and naval guns.

Furthermore, Brown and Weizman agreed that Israel would cooperate with the U.S. in research and development and in certain military procurement programs. This would allow Israel to compete with U.S. defense contractors to sell certain military equipment to the American armed services.

Today, Egyptian Defense Minister Kamal Hassan Ali went on a two day, tour of U.S. air bases to inspect American equipment that Egypt might request. The U.S. has promised $2 billion in military aid to Egypt in connection with the peace program, according to Pentagon sources. Egypt’s requirements will be worked out over the next few months.

The $5 billion for both countries is in addition to current U.S. aid in the amount of $1.8 billion for military and economic assistance to Israel and $1 billion in economic aid to Egypt this year.

Meanwhile, lower echelon Egyptian and Israeli officials were working out the final details of the military annexes to the peace treaty. One remaining issue is whether Israel will give up the Sinai oil fields nine months after the treaty is signed or seven months-after as Egypt has requested.

BEGIN, DAYAN, SADAT DUE IN A FEW DAYS

In another development, it was learned that Israeli foreign Minister Moshe Dayan is due here Thursday to meet with Secretary of State Cyrus Vance to draft an understanding of U.S. and Israeli commitments under the peace treaty. Premier Menachem Begin and Mrs. Aliza Begin are due in New York Friday where they will rest until leaving for Washington Sunday. Begin will be accompanied by about 15 of his top aides.

President Anwar Sadat and Mrs. Jihan Sadat are expected to arrive in Washington Sunday directly from Cairo. Neither the Israeli not Egyptian leaders will stay at Blair House, the Presidential hostelry for visiting foreign dignitaries.