Simon Says U.S. Cut Aid to Israel by $500 Million to Maintain a Balance with Domestic Need and to Re

Secretary of the Treasury William E. Simon told Israelis today that the U.S. cut aid to Israel by $500 million because it “has to maintain a delicate balance with its domestic needs and must heed the people who are beginning to question foreign aid.” Simon, who arrived here this morning for a three-day visit to Israel, told reporters at Ben Gurion Airport, “I don’t think anyone can question the generosity of the United States over the years.”

The Secretary spoke warmly of U.S. friendship for Israel and noted that the Ford Administration has requested $1.8 billion in aid to help Israel promote and develop its economy. He said a just and lasting peace in the Middle East was closely linked with the economic stability of Israel and all of the countries of the area and that it was the purpose of American economic aid to improve the atmosphere for peace.

Questioned about U.S. economic aid to Syria, Simon stressed that it was limited and was being given in accordance with existing American policy. He described the Arab boycott as one of the difficulties on the road to peace. of which there will be many, and cited President Ford’s statement deploring discrimination arising from the Arab boycott.

Simon, accompanied by his wife and an entourage of 20, arrived here from Riyadh, Saudi Arabia and will visit Syria. Egypt and the United Arab Emirates after concluding his talks here with Premier Yitzhak Rabin, Finance Minister Yehoshua Rabinowitz and Defense Minister Shimon Peres. He was greeted at the airport by Rabinowitz who said the Secretary’s visit would enable him to see just how Israel was “tightening its belt.”

WILL SIGN AN AGREEMENT

During his stay in Israel. Simon and Rabinowitz will serve as co-chairmen of a meeting of the Israeli-U.S. Economic Committee established last year to discuss such matters as promoting last year to discuss such matters as promoting Israel’s exports, increasing American investments and the supply of raw materials to Israel. The latter does not include oil supplies which are covered by a separate agreement linked to Israel’s return of the Sinai oilfields to Egypt. During his visit here, Simon will sign an agreement abolishing double taxation between the U.S. and Israel. He will receive an honorary PhD. degree from Tel Aviv University.

Meanwhile, Assistant Secretary of Commerce Travis E. Reed, a member of Simon’s party, told a meeting of the Israel-America Chamber of Commerce here that his office is encouraging American businessmen to invest in a selective group of Israeli industries, notably electronics, chemical and science-based industries and the metal industry. Reed expressed the belief that the Arab boycott was ebbing and would fade away in a short time.