Holding the line on two fronts

On the world scene over this past week to things happened which stand out for their novel determination and their possible long-term effect on many countries and peoples.

One was an effort by the United States government to hold the wage line against postal employees. The other was a decision by President Reagan to defer indefinitely the delivery of certain warplanes to Israel.

The leaders of the seven most important industrial democracies were meeting near Ottawa at the seventh economic summit while these two events were developing. They discussed inconclusively and in considerable disagreement what could or should be done to resolve the main problems that plague them all -- inflation and unemployment.

But nothing those seven "great" persons could do or say during their Ottawa "summit" is likely to influence history as much as could those two specific, if tentative, actions taken by Mr. Reagan's government in Washington.

Can the wage line be held in the public sector of the US economy?

And can Mr. Reagan withdraw the "Blank check" from Israel that Israeli Prime Minister Menachem Begin seems to think he is entitled to enjoy?

The economic importance of the effort to hold the wage line against half a million US postal workers can be seen in better perspective against the record of Britain's current prime minister, Margaret Thatcher.

She, a conservative like Mr. Reagan, came to office just a little more than two years ago planning and intending to check inflation in Britain by much the same policies that Mr. Reagan is trying to apply to the American economy.

But her first important economic action was to let through wage increases of 25 percent for British civil servants and about 20 percent throughout the vast structure of nationalized British industries. She has never since been able to get a firm grip on the British inflation. It is down, from its worst highs.

But to start out with wage rises above the inflation rate did not mark the dawn of a new day in Britain, but rather the beginning of economic problems that have become more intractable.

Mr. Reagan will not be able to freeze wages throughout the American economy. But if he can use wages in the public service as a guideline, and if he can hold government wage rises over the next year or so to a level below the inflation rate, he will have injected a new element of restraint into the American economic system. He might be able to build from this a gradual slowing of both wages and prices. The postal settlement was at just under 4 percent per year.

The Ottawa summit conference was supposedly only about economic matters, but Israeli's new military offensive against the Palestinians in Lebanon intruded. The ferocity of the July 17 bombing attack on the alleged Palestinian control center in Beirut (300 killed) underlined the pleas from the West European allies to have Mr. Reagan restrain Mr. Begin.

Only Mr. Reagan can apply restraint. The US is the only outside supplier of economic aid and military weaponry to Israel. The others, who long since ceased supplying Israel, have little leverage in Tel Aviv. But a president of the US has enormous leverage, if he chooses to use it.

Dwight D. Eisenhower was the last American President who used American leverage on Israel firmly and effectively. Others have made tentative starts at trying to restrain Israel's military expansion. Presidents Nixon and Ford both made mild efforts but gave up under pressure from the pro-Israel lobby in Washington. President Carter went further than any other president since Eisenhower, but he was forced into retreat particularly on the major issue of self-rule for the Arabs of the occupied territories.

Mr. Reagan's act of holding up the plane deliveries "indefinitely" is the strongest effort at restraint which he has yet applied. A White House aide reported that when the President was told of the bombing of Beirut, he remarked: "That fellow Begin makes it hard to help him."

Among Middle East experts it is generally felt that right now is a decisive moment in the relations between the US and all the countries of the Middle East. If Mr. Begin is allowed to continue with his military offensive unchecked, it is assumed that he will then turn his attention to the annexation of the occupied territories (West Bank, Gaza Trip, east Jerusalem, and Golan Heights).

If that happens, US relations with the Arab countries will be strained. Progress would be held up toward the idea of a "strategic consensus" against Soviet intrusion in the area. It is doubtful that any Arab country would be willing to grant bases of facilities for the Rapid Deployment Force the Pentagon is trying to put together to safeguard Western interests there.

US relations with Japan and with the West European allies would also be strained. They tend to look to Washington to protect their access to Middle East oil by putting restraints on Israel. If Mr. Begin goes ahead with annexation of Arab lands, the allies will hold the US responsible for the consequences.

The above is a point the others at the Ottawa summit made to President Reagan. He had heard it before, second hand, from his advisers. This time he heard it straight from the others. This is probably a major reason why he did decide that he would have to take a firm step following the bombing of Beirut.

Thus the scene is set for a test of political strength in Washington between the President of the United States and the prime minister of Israel.

Reactions on Capitol Hill during the week seemed to suggest that Mr. Begin would not this time get the automatic support he is accustomed to expect on such issues. It seems possible that for once Mr. Begin has overplayed his hand and will have to back down. But he has always won out before, and no one can be sure which way the tu g of war will go.

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