Israel and US budget: time to reassess

THE fiscal crisis ahead for the United States in the form of $200 billion deficits may have its own silver linings if we are wise enough to see them: a much-needed reexamination of the Reagan administration's profligate defense program, and of America's role in the world. It will also offer an opportunity to cap the growth of military and economic aid for Israel, and to reassess the premises of our relationship with Israel. Israel, too, has been living beyond its means and relying excessively on military power, thanks to the $25 billion in US military and economic aid it has received since the October war of 1973. The day of reckoning for Israel's economy is at hand; that day for its military policy cannot be more than a few years off.

The administration is now confronting the importunings of Israeli delegations for large increases next year in military and economic aid. Israel's current $2. 6 billion program, for the first time consisting of all grants, is the largest for any US aid recipient; over one-quarter of the worldwide security assistance program; and half as big as our $5 billion in worldwide bilateral development aid, spread among some 60 countries. Israel wants $4.2 billion for fiscal year 1986. And it is pressing for an extra three-quarter billion in US economic aid for the current fiscal year.

If we increased aid for Israel, we would almost certainly have to increase our $2 billion aid to Egypt to maintain a certain ''balance'' in our relationships with both countries. Already, the two consume 45 percent of the $ 10 billion worldwide security assistance program.

Israel's request is not surprising. To maintain indefinitely its military superiority over any potential combination of Arab forces would require constantly rising military aid from the United States.

How will the US government respond? Would the administration increase aid in the face of $200 billion deficits? The President could take advantage of the political cover afforded by the budget situation to turn Israel down. We won't know until Reagan's final budget decisions are made, and perhaps not then, as the administration could elect to finesse the issue by sending up a budget with a ''plug'' number for Israel, putting off a decision and passing the buck to the Congress.

The Israelis are astute players in the Washington game and will back off and opt for a ''no decision yet'' response from the executive if the signals are unfavorable. Or they'll take modest increases in the administration's budget request while reserving the option to go after more in Congress, an effective strategy in the past.

What is the case for more military aid to Israel? The Israelis and the pro-Israel lobby will point out that Israel already spends 25 percent of GNP on defense and cannot maintain the qualitative and technological superiority over Arab armies they rely on for national survival without increased military aid. They will point to Syria's military buildup. They will argue that it is their Arab opponents who refuse to accept the state of Israel as a reality with which they are willing to live in peace. They will claim that Israel is America's ''strategic ally,'' the critical ''linchpin against Soviet expansion'' in the Middle East, which carries a significant share of America's defense burden there at modest cost. They will invoke opinion polls reflecting US public support for Israel over Arab nations by 4 or 5 to 1.

Others could argue that Israel's reliance on military superiority to protect a nation of 4 million surrounded by 100 million Arabs is a road to disaster over the long run, however successful it may have been until now. Syria's recent military buildup and acquisition of high-technology Soviet weapons, a direct response to Israel's invasion of Lebanon and attacks against Syrian forces there , have not altered the fact that Israel's forces are still more than adequate to defeat any possible combination of Arab forces. Israel's forces are largely irrelevant to a Soviet threat to US interests in the Middle East, and by their very existence as a threat to their Arab neighbors they create opportunities for Soviet meddling and influence in the region. Israel's territorial aggrandizement and intransigence on the West Bank issue have made it politically impossible for Arab moderates to extend the hand of peace. And American public support could disappear quickly if Israel were to act contrary to US interests or drag the US into a war to save Israel from its own folly.

It is surprising that Israel's retention of the West Bank, which it claims as part of historic greater Israel, its annexation of the Golan territory seized from Syria, and the bloody and disastrous 1982 invasion of Lebanon have brought so little public criticism in the US of the extraordinary military and economic aid programs that have made these actions possible. The cause-and-effect relationship is not clear, but Israel would be hard put to carry the $400 million annual costs of its West Bank settlements without our annual economic subsidy. Despite Israel's legal obligation to use US-supplied arms only for self-defense, successive administrations and Congresses have been unwilling to enforce the letter and intent of laws requiring that aid be cut off to nations so misusing our aid, as was done when Turkey invaded Cyprus.

Should we provide more aid to Israel at this juncture? Congress already has raised aid from the $850 million recommended by the administration for 1985 to $ 1.2 billion. Israel wants an extra $750 million for 1985 and $2 more billion for 1986. If we accede to its request, we would be assuming responsibility for bailing Israel out of a disastrous economic situation of its own making. But we would acquire no more effective authority than we now have over Israel's economic or foreign policy, which is partly responsible for its economic situation. The danger is that more economic aid would ameliorate the economic crisis enough to remove incentives for the Israelis to take the drastic steps essential to putting their economic house in order. We will do the Israelis no favor to bail them out. Increased dependence with no end in sight would impose additional strains on a troubled relationship.

The administration need not now try to resolve what may be irreconcilable differences over the US-Israeli relationship. It can reject pressures for more aid on grounds that the current $2.6 billion in grant military and economic aid is sufficient to sustain Israel's military superiority for now and to cushion the effects of its defense burden on its economy.

It is hoped that a halt to further increases in aid to Israel would lead to more than a budget debate. The concept of Israel as an ''ally'' is more rooted in myth and emotion than in any straightforward assessment of where US-Israeli interests coincide and conflict. Our different and sometimes conflicting interests carry with them the seeds of far greater tragedies than so far encountered. The lessons of the invasion of Lebanon, only now becoming appreciated, could turn Israel away from a potentially fatal reliance on military force to political accommodation of the realities of its existence. At least, in Israel these issues are openly debated. We badly need such a frank debate in the US.

No honest public debate can take place on such an emotional issue without the cooperation, more than that, the leadership, of the American Jewish community. If it attacks all those who wish to raise these issues as anti-Israel, our political leaders, particularly in the Congress, will not be willing to face the issue of the US-Israel relationship and we will miss an opportunity to set that relationship on a sounder basis than myth and emotion.

At this writing it is hard to say what the prospects are for this kind of responsible leadership by either our political leaders or the American Jewish community. The Israeli delegations will be returning to Washington on Dec. 19 and 20 for further discussions on their request for more economic and military aid. The President must take the first step by rejecting the Israeli request. If he does, the stage will be set for a needed public debate, and Israel's supporters in the Congress will bear the principal responsibility for the character of that debate.

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