WYE RIVER FUNDING:  Neither the House or Senate bills includes the Wye River funding package requested by Clinton.  A portion of the Wye package,  $100 million in military and economic aid to Jordan, was appropriated in an emergency supplemental bill earlier this year (which is excluded from the Middle East funding cap.)  But the Wye additional funding for Israel and the Palestinian Authority has not been appropriated.  The Administration had requested $500 million in fiscal year 2000 (of a total of $1.9 billion promised for dispersal over three years) to buttress the accords signed in October, 1998.  The Congressional Quarterly Weekly reported on July 17 that Rep. David Obey (D-WI), the ranking Democrat on the House Appropriations Committee urged that the rest of the Wye River funds be withheld until the peace agreement is actually implemented.  "The money should not be in the bill until there is performance. Let's see what happens between now and October - and then respond to the implementation."  Delaying the Wye funds will also give lawmakers time to determine how to provide the additional money without breaching the budget caps. The Administration has indicated it will come to the Hill in the fall with a request for supplemental funding for Wye.

Churches for Middle East Peace has urged Congress to seek answers as to how the $1.2 billion total requested for Israel was determined, and advocated that additional aid should not be provided if Israel does not carry out the withdrawals promised.   CMEP asked for assurance that none of the Wye funds be used to pay for by-pass roads for settlers in the West Bank, an implementation expenditure reportedly cited by the Israel Finance Minister soon after Wye.  Peace Now, an Israeli organization with an American affiliate active on Capitol Hill, reports on July 22 that three new bypass roads for the use of West Bank settlers have been approved since the establishment of the Barak government. Peace Now's press release notes that "The land used for bypass roads is confiscated from Palestinians, who are also denied permission to build within 250 meters of the highways. A total of $25 million is now being spent to build bypass roads for settlers. Meanwhile, Palestinians are not connected to the new highways and are left to use old, torn up roads."

HOUSE DEBATE: Debate in the House committee focused on peripheral issues related to the disproportionate amount of aid provided Israel.  Rep. Sonny Callahan (R-AL), chairman of the House Foreign Operations Appropriation Subcommittee, railed against the power of AIPAC. " The Israeli lobby is so effective that they eliminate any ability for Congress to have any say-so." He had tried unsuccessfully to end the longstanding provision allowing Israel to receive all of its $2.9 billion in economic and military assistance at the beginning of the fiscal year in October thus earning interest while other countries receive their aid throughout the year.  Callahan said this provision reduces U.S. leverage with Israel and called it "stupid foreign aid policy."   Rep. C.W. Bill Young (R-FL), chair of the full Appropriations Committee, tried to get a similar rapid payment plan for Egypt but agreed todelay his initiative until the committee takes up the Wye River funding. Rep. Michael Forbes (R.>D, NY) complained about Israel's failure to ship the grain its receives, under a farm loan guarantee program,  from the U.S. on U.S,-flagged ships.

Rep. Tom Campbell (R-CA) introduced an amendment during floor debate that would further reduce Israel's economic (FY2000 Economic Support Fund) aid by $30 million and Egypt's by $20 million (to the amounts requested by the Administration).  He urged that this $50 million be used to increase assistance to Latin America, sub-Saharan Africa and India.  He noted that economic aid to Israel is $170 per capita, to Egypt is $32 per capita and is only $2.05 per capita for sub-Saharan Africa, $1.20 per capita in Latin America and $.17 per capita in India. He did not include military aid in the
per capita breakdown, saying "that is different. I support military aid to Israel."   His amendment received only 13 votes.

LOOK TO THE FUTURE: CQ Weekly included in its July 17 article startling comments about the challenges that appropriators may face when it comes to the Middle East from Richard Haass, director of foreign policy studies for the Brookings Institution.   Even as lawmakers plan to phase out economic aid to Israel and Egypt over the next decade, huge increases of U.S. contributions can be expected. For instance, peace between Israel and Syria might require U.S. financial support for the relocation of more than 16,000 Israelis from the Golan Heights, as well as moving Israeli industry and military bases and the deployment of U.S. peacekeepers to the area. Haass estimates that a Syria-Israel agreement could cost the U.S. from $5 billion to $15 billion a year.  Peace with the Palestinians would require a continuation of aid to both sides.  "We're talking multiple billions of dollars over many years."

SUMMARY OF MIDDLE EAST FOREIGN AID: The plan for phasing out economic support for Israel and Egypt continued, with half of Israel's  yearly decrease going to increase its military assistance.  Clinton had asked that the economic decreases be accelerated but Congress stayed with the plan outlined by Israel. In the House's report, it was noted that the Committee has retained a cap (an overall limit)  on Middle East spending at a level of $5,318,150,000. The report says that it intends to continue the phased reduction in the Middle East cap next year, a reduction that will correspond with the phased reductions in aid to Israel and Egypt and will provide for the "allocation of funds for priority activities in other areas of the world."

• Israel's economic assistance is reduced from $1.08 billion in FY99 to $960 million in FY00, $30 million above the President's request.  (- $120 million).
• Israel's military assistance is increased from $1.86 billion in FY99 to $1.92 billion in FY00, the same as the President's request. (+ $60 million).
• Egypt's economic assistance is decreased from $775 million in FY99 to $735 million in FY00, $20 million above the President's request (- $40 million) in both House and Senate.
• Egypt's military assistance is level funded at $1.3 million for FY00, same as the President's request.
• Provides $200 million in economic assistance for Jordan in FY00, same as requested. $50 million of this is not included in the funding cap.)
• Provides $125 million in military assistance for Jordan in FY00, same as requested. $50 million of this is not included in the funding cap.)
• There was no amount earmarked for the Palestinians. There were no earmarks for the Palestinians in earlier fiscal years appropriation legislation either. For FY99, the State Department had requested a total of $100 million and AID provided $75 million in assistance.  The House report for FY00 states that the funding for West Bank and Gaza should not exceed the amount allocated for FY99.  (a $25 million increase requested by the President was not accepted.)
• The Senate report recommends $600,000 for the Palestinian-Israeli cooperation program.
• The Senate bill also earmarks $60 million in funding for the Refugee Resettlement Program in Israel - with report language indicating this should remain the level for future years.

MORE FOR ARMS: Churches for Middle East Peace advocates that the Middle East peace process should bring reductions in military assistance going to Israel, Egypt and Jordan for the benefit of economic assistance that promote sustainable development, regional cooperation and integration as well as confidence building/tension reduction measures such as troop withdrawals and the resettlement of Palestinian refugees and Israeli settlers.

Yet, during Prime Minister Barak' visit to Washington in mid-July, the largest arms purchase in Israel's history was announced.  Israel will purchase 50 F-16E fighter-bombers at a cost of $2.5 billion to be delivered between 2002-2004 and wants an option to order up to 60 more jets for a further $2 billion.  According to the New York Times of July 19, "Israel already has more than 250 F-16's, the largest fleet outside the United States."  This was good news for Lockheed Martin, a Maryland-based contractor which was recently  shaken by House recommendations to halt its production of
F-22s.   Boeing had hoped the new Israeli purchase would be of their F-15s. Both defense contractors had sweetened the deal by offering local investments in Israel;  $1 billion was offered by Boeing, nearly $900 million by Lockhead-Martin.  The Federation of American Scientists' Arms Sales Monitor urged that Congress prohibit "offsets" on exports financed by U.S. military aid and called offsets "grossly unfair to the general public, which already pays for the weapons development costs and the purchase of the weapons by foreign states."

The Washington Post reported that President Clinton promised Mr. Barak in July that the United States "will sustain its annual military assistance to Israel, and incrementally increase its level by one-third over the next decade to a level of $2.4 billion, subject to Congressional consultations and approval."