March 1992, Page 41

What They Said: Secretary Baker and House Members on U.S. Loan Guarantees for Israel

(Following are excerpts from the Feb. 24 hearing of the Foreign Operations Subcommittee of the House Appropriations Committee with Secretary of State James Baker 3rd.)

Committee Chairman David Obey (D-WI): As I said in our hearing Friday, I want to very much help provide the assistance that's been requested for Soviet Jewry. I do not and will not do that which in any way either undermines American policy or contributes in any way-in any way-to the expansion of settlements in the occupied territories. . . It seems to me that to be credible to the American people, that any such suspension of settlement activities would, in fact, have to be looking at all activities, not merely the construction of housing units. . . I would hope that you would stick to your guns on that one. . .

Rep. Sidney Yates (D-IL): Is that your understanding of what is meant by your term, freeze? It seems to me that the chairman's interpretation would not only make this a deep freeze, but might be the beginning of a new ice age-[laughter]. . .

Sec. Baker: Mr. Yates, first of all, I've not used the term freeze, because I think it has sort of a buzz word connotation. However, let me. . . begin by saying that. . . we support, as I think most everyone knows, Mr. Yates, the principle of absorption assistance to Israel to absorb those immigrants. We do believe, however, that if we are going to add to the already very substantial support that the United States provides to Israel on an annual basis, by provisioning loan guarantees, that we should do so on a basis that supports longstanding United States policy-policy that has been the policy of this government since 1967 through Republican and Democratic administrations, without reservation and without exception.

So what we've said is that we will support loan guarantees of up to $2 billion for five years if there is a halt or an end to settlement activity. We understand that the current government of Israel. . . have their principles and their positions on policy, just as we have our principles and our position on policy. So we've said that we would support the provision of loan guarantees of some lesser amount, if there was a halt or an end to new construction activity, which is the way we've said it-new construction activity. . .

The choice, Mr. Chairman, from our standpoint, is Israel's. . . She can determine. . . whether she wants to take action which would permit the strong support of both the legislative and executive branches for these loan guarantees or not. . .

Rep. William Green (R-NY): Let me turn now if I may to. . . the Arab League boycott of Israel. And in the past, you've expressed yours and the administration's opposition to that boycott.

Sec. Baker: We've made our opposition to the boycott pretty forcefully known. . . During the course of trying to put together a peace process, we even suggested that the Arabs agree to terminate the boycott in exchange for some action on the part of Israel, for instance the suspension of settlement activity, and the Arabs agreed to do it and Israel said no dice. They weren't interested. . .

Rep. Larry Smith (D-FL): You talk now about loan guarantees and about having a decision made, which you just enunciated, that unless Israel freezes the settlements they will not get the $2 billion, that they have the ability within themselves to achieve some lesser amount should they do something with reference to the freeze. But I hear nothing about imposing on the Arab states-for instance on arms sales, a conditionality that you can't get an arms sale unless you terminate the boycott, just like you would ask Israel to freeze the settlements.

You came before this committee in the middle of last year, about the end of May, I believe, and at the end of the hearing you made a very, very dramatic statement, and that was that the settlements are the biggest obstacle to peace, not the-

Sec. Baker: No sir, I said there is no greater obstacle to peace. There are some equally gret but there is no greater obstacle.

Rep. Smith: Okay, there is no greater obstacle to peace. You didn't mention-

Rep. Obey: Larry, can you wind it up, we are past your time.

Rep. Smith: Thank you, Mr. Chairman. You didn't mention the fact that Syria has a dictator, you didn't mention the fact that there have been-in Israel over the last numbers of years, and now once again, enormous intrusions by armed rogue elements killing Jews. . . My question is, given the context in which we deal, and the fact that since the time when you made that statement, the parties have gone to Madrid, the parties have then come separately to peace tables, etc., why now are you pitching such a strong stand, especially on the loan guarantees, for the absorption that you say the United States absolutely supports? Why must you insist on a loan guarantee that is coupled with a freeze of settlements when you in fact are not putting any conditions on anyone else on the Arab side at all. . . Aren't you presupposing and putting yourself in the position of negotiating for one side, putting the other side at a significant disadvantage?

Sec. Baker: Absolutely not, Mr. Smith. As I mentioned in an answer to a prior question, our opposition to settlements has been there since 1967 through every administration that has been in office since that time. I don't-there's nobody else-

Rep. Smith: [Inaudible]

Sec. Baker: Let me just finish. Nobody else is asking us for $10 billion in additional assistance over and above the $3 to $4 billion that we give every year with no strings attached.

Rep. Smith: Mr. Secretary, they're not asking for a dime in this issue-

Sec. Baker: So what I [interruption by Rep. Smith]. So [interruption]. Well, let me just [interruption]. Well, do you want me to answer your question, or do you want to filibuster?

Rep. Smith: Yes, sir, but I would like-you know they're not asking for any assistance-

Rep. Obey: Very shortly, Mr. Secretary, because I want to make sure that every member of the committee gets a chance to question.

Sec. Baker: Well, I think I probably finished the answer anyway.

Rep. Smith: Mr. Secretary-Mr. Chairman, point of personal privilege. You know, you've done that before, Mr. Secretary, and I find it extremely offensive. I didn't ask you anything confrontational personally. This is all on policy. And for you not to finish the answer is another attempt to try to reject any kind of significant-

Sec. Baker: No, Larry, I think I finished the answer.

Rep. Smith: Well, sir, you did not finish the answer-

Sec. Baker: I finished it-

Rep. Smith: -and it's basically the same way you want to deal with this subject.

Sec. Baker: I finished it as far as I was concerned, and I will determine when I finish my answers, not you. [Laughter.]

Rep. Smith: I hope some day the American public is going to determine whether you finish the answers or not. Disgraceful!

Rep. Yates: . . . There would be no additional losses to the U.S. government as a result of these guarantees and so it would not cost the taxpayers any more as a result of the loan guarantees. Isn't that your impression?

Sec. Baker: That may or may not be true, Mr. Yates, depending, of course, upon ultimate repayment. But let me just say that I think the United States has a right to know, if we're going to go forward with this, that we're not. . . financing directly or indirectly something we oppose and have opposed since 1967. That's the point that I want to make.

Rep. Obey: . . . With respect to the Middle East-to the loan guarantee negotiations now going on: I would urge you not to be pushed on the issue of timing. . . In my view, Congress ought not to vote on this until we know the nature of the agreement, if any, between our government and the government of Israel. . . I need to know, and I think members of the House need to know, that whatever agreements are reached are consistent with U.S. policy, and we need to know that they will in the end provide no cost to the taxpayer.

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