The State Department confirmed today — and welcomed — Israel’s agreement to return $51 million of the $1.2 billion it received from the U.S. in economic aid last fall to help the Reagan Administration meet the budget cutting requirements of the recently enacted Gramm-Rudman law.
State Department spokesman Bernard Kalb, indicating the U.S. was appreciative of the Israeli move, said the two countries are working on an agreement as to how the money will be repaid. The $1.2 billion, a grant approved by Congress, was delivered to Israel in a lump sum at the start of the 1986 fiscal year last October 1. Israel also faces a reduction in the $1.8 billion military aid grant for fiscal 1986, the bulk of which has not yet been delivered.
Kalb said he did not know “what started what” in Israel’s decision to return the amount that the Gramm-Rudman legislation requires be deducted from U.S. aid to recipient countries. When the automatic cuts go into effect on March 1, every country receiving aid from the U.S. will have 4.3 percent of the amount approved for it by Congress deducted from its aid package. Unlike Israel, other recipients get their economic aid funds at intervals during the fiscal year.
Dan Halperin, Economic Affairs Minister at the Israel Embassy here, told the Jewish Telegraphic Agency that Israel was told by the U.S. government that there was a “problem” resulting from the Gramm-Rudman law. He said the message was understood to be a “hint” and that Israel decided voluntarily to return the money.
Halperin added, however, that the U.S. and Israel were in agreement that Israel was under no legal obligation to return money already awarded it. Halperin also said that a reduction of the $1.8 billion approved by Congress in military aid would be, in a sense, “a breach of an understanding or an agreement” but that Israel would not protest the cut should it go into effect. “I don’t think we can contest it on legal grounds,” he said.
The State Department has said that all recipients of U.S. military aid, including Israel, would be affected by the automatic cuts in March.
With respect to the $51 million from the economic aid package, Halperin said U.S. Embassy officials in Israel were negotiating how the money would be returned. It might be deducted from other funds awarded to Israel but not yet delivered or Israel “might simply send a check,” he said.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
