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The Christian Science Monitor

1983 07 05 Opinion And Commentary; Pg. 26

The rising cost of Israel

by Joseph C. Harsch

Israel invaded Lebanon a year and a month ago, allegedly to clear its northern borders of enemies and assure peace on that frontier. But the General Accounting Office of the Congress of the United States in a new report on aid to Israel informs us that this does not mean any prospective decline in Israel's demands on the American taxpayer.

On the contrary, it forecasts a further rise in the aid which Israel will expect from Washington. Unless there is such a rise the amount of US aid at present rates would largely be used up in servicing Israel's existing debt to the US.

The report notes that ''increased aid and better terms requested by Israel in its current aid submission include compensation for its losses during the Lebanon campaign.'' The cost of Israel to the American taxpayer was negligible from Israel's inception in 1948 down to the 1967 war. But that war began the expansion of Israel and also the expansion of Israel's dependence on the American taxpayer.

The farther Israel's reach, the more support Israel has needed to keep going. The idea of a regular annual US subsidy to Israel begins with the 1967 war. ( Comment: When Israel deliberately attacked the USS Liberty killing 34 American Sailors. {NLE}) It started at the figure of $250 million. It increased steadily thereafter. It reached an annual $1.5 billion by the 1973 war, went to $2.5 billion after that war, will be $3 billion for 1984 if Congress grants what Israel is asking.

The present figure of $2.5 billion is roughly one-fourth of current US foreign aid. Roughly another fourth goes to Egypt. This is part of the package which produced the Israel-Egypt peace treaty. In effect, the US subsidizes Egypt to make peace with Israel. Hence it is currently costing the US roughly $5 billion a year to keep Israel going at home and at peace with its most important Arab neighbor.

In the early years after the 1967 war most US aid was in the form of loans at favorable or ''soft'' rates. By now more than 60 percent of the aid is in the form of direct grants. Much of the money previously loaned has been ''forgiven.'' The total of US aid to Israel now stands at about $29 billion.

But that is only the amount of support which the Congress openly and officially grants to Israel. Israel receives roughly $750 million a year in charitable transfers from US citizens. The Internal Revenue Service regards these as tax-exempt for US income tax purposes. Charitable transfers to other foreign countries are taxed.

Israel sells nearly half a billion dollars' worth of its bonds in the US each year. Israel has about $3 billion in short-term loans from US banks. These loans are serviced out of the subsidy. Israel exports annually to the US about a billion dollars' worth in goods and services. Most of this, about 95 percent, comes in duty-free.

If all of these forms of support are lumped together, Israel draws somewhere around $10 billion a year from the US and its citizens. The actual subsidy at its present rate of $3 billion is essential to the operation. If it were canceled, Israel's bonds would be valueless and its credit nonexistent. It would be economically and financially bankrupt.

Another meaning of this is that the American taxpayer is paying for Israel's living standard, for its wars, for its conquests, and for those settlements which are going up throughout the occupied Arab territories in violation of the agreement which former President Carter thought he had with Prime Minister Menachem Begin.

No other foreign country is treated as generously for the sake of its kinfolk in the US. There are about 3 million Jews in Israel, 6 million in the US. There are 30 million Poles in Poland and 8.5 million in the US. There are some 3 million Irish in Ireland and how many in the US? That depends on how you count them. If Ireland and Poland and other foreign countries were treated by the formula which the US uses for Israel - there would be a lot less money left in the US Treasury for Americans.

I have been unable to find a record of any other country subsidizing another per capita on such a generous regular basis. The Soviet subsidy to Cuba is almost the same. But there are three times as many Cubans as there are Jews in Israel. The General Accounting Office report notes that Israeli leaders expect another war with Arabs and also that relative Arab military capability will be increasing.

The prospect held forth by the report is that so long as Israel continues in a state of hostility with its Arab neighbors, its costs will continue to rise and the US taxpayer will continue to be expected to pay.



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