American financial aid to Israel began in 1949 with a $100,000 trade loan and peaked in the mid-1990s at over $5 billion a year in grants and loans. Over fifty years, the total in grants and loans has amounted to $79 billion. Is the continuation of aid to Israel a good idea? If so, for how long should it go on? What criteria should it meet? Does an aid package of some $17 billion to help smooth the way for a peace treaty with Syria make sense? To assess these matters, the Middle East Quarterly invited four analysts: Patrick Clawson is senior editor of the Quarterly; Ester Kurz is legislative strategy director of the American Israel Public Affairs Committee (AIPAC); Gwendolyn Mikell is a senior fellow for Africa at the Council on Foreign Relations; and Hillel Fradkin is resident scholar at the American Enterprise Institute. Robert Satloff, executive director of the Washington Institute for Near East Policy, moderated the discussion. They met in Washington on March 17, 2000.
Aid as a Symbol

Middle East Quarterly: Has aid become so symbolic of the U.S.-Israel relationship that Israel cannot afford its cutoff?

Patrick Clawson: Yes, and it's unfortunate that support for aid to Israel has become the most important indicator of whether or not one favors a close U.S.-Israel relationship. It would be good to disassociate the two, so that those who support a close relationship could take different positions on aid. We should find a currency other than cash by which to measure the strength of that relationship.

Ester Kurz: I disagree with the question's premise. Aid is less a symbol of the U.S.-Israel relationship than it is a real benefit to the United States and Israel. We give aid to Israel to maintain its security in a very tough region and a very important part of the world in order to advance critical U.S. interests. If that aid were reduced to a point that Israel couldn't buy the equipment it needs to defend itself and maintain the peace, that would be dangerous to us.

Furthermore, the U.S. and Israel have agreed on a plan where aid is in fact going down each year. It was reduced by $60 million two years ago, by $120 million last year, and by $180 million this year. So it's already being looked at in terms of its concrete value to Israel and to the United States.

Gwendolyn Mikell: I have heard from constituencies that are aware that there is a lot of symbolism in aid to Israel. They understand the importance of maintaining Israel's security, but many of them are saying: "Couldn't we do that in ways that that don't always involve cash?" Notice: I didn't say do away with aid to Israel.. But many people are arguing that, in the current environment, some of the aid to Israel could be used more productively in non-Western regions like Africa where needs are great and, believe it or not, American security interests are also important. While they support Israel, they'd love to see a sharing of the resources that are being used there.

Kurz: I would argue for increasing rather than redistributing the same-sized pie. We're the greatest country in the world, and we should be able to meet our international obligations wherever they may be. We have the resources. When you look at what we're spending on defense versus what we're spending on foreign aid, it's very unfortunate.

Hillel Fradkin: To return to the initial question: Do we need some way other than aid to express the relationship between United States and Israel? It would be nice, but as a symbolic matter, financial aid has come to be identified with the closeness of that relationship; so, we have to ask how it would appear to other countries if it were substantially reduced. The reductions that have taken place are fairly small. The alternatives to aid might involve security arrangements that could restrict the independence of both the United States and Israel. That makes it hard to find a substitute means of symbolizing the relationship.

The more immediate question is: "How will things look, now that we're talking about potentially enormous increases in an aid package to Israel?"

Why Is Diplomacy So Expensive?

Kurz: You are talking about the potential package of aid to Israel to help it reach a deal with Syria?

Fradkin: Right. If $79 billion is the grand total for aid over a half century, and we're talking about $17 billion or more for the Syria package, then this an enormous increase of funds going to Israel.

MEQ: Is it a good bargain for the United States to invest these billions?

Kurz: Undoubtedly, the Syria package would be a large amount, but we don't know what the amount is going to be, or even if it's going to be. Nobody knows how it will be funded and over how many years. And what we're talking about here is nothing less than an end to the Arab-Israeli conflict.

Fradkin: If there is a proposal for an aid package of $17 billion or more, that discussion is not going to take place largely within NGOs and Congressional committees. It is going to spill over into the public arena. And it will invite a discussion not only of U.S. aid to Israel, but of foreign aid as such. It's clear to me that this will be a vigorous and even acrimonious discussion.

We should expect that a sum this large will be dealt with in a way unlike aid was handled in the past. It starts with the simple question of where the money is going to come from. The most obvious prospect is the budget surplus, which is going to run about $120 billion this year, going up prospectively to larger sums. That's found money. On the other hand, Republicans and Democrats have proposed lots of ways to spend it. There's going to be a real debate.

Kurz: The Syria package will be multi-year and stretched out.

Fradkin: Yes, but it's like my mortgage. I know I get to pay it over a long period, but it still looks big.

Also, the question of how the burden is being borne will be raised in other contexts. There are already issues between the United States and Israel about how aid is being used. To put it more bluntly, there are quarrels about the use of technology with China, and, if we have a full-blown quarrel, people will ask, "Who is bearing the costs for this?" There will be allegations that the United States is putting up the money and then pays a price in other ways as well. So this is an important consideration.

MEQ: Let me press you on this. Look at the trend: After the first peace treaty with an Arab state, there was X dollars in aid; second peace treaty, with the Palestinians, there was X plus Y dollars. After the Syrian treaty, there will be X plus Y plus Z dollars. Is it fair to say that if all the Arab states make peace with Israel, then aid to Israel will go much, much higher?

Kurz: No, that's not fair. In the case of Syria—if there is an agreement with Syria—the initial, one-shot costs will be substantial, but over the long term, those costs will more than pay for themselves. The benefits to the United States of having Egypt, Jordan, Syria, and the Palestinians at peace with Israel, as U.S. allies, pursuing moderate policies, are incalculable in advancing longstanding U.S. goals in this critical region.

MEQ: Can we afford another peace treaty?

Kurz: Hopefully, this will be the mother of all peace treaties because Syria has been the most hostile neighbor of all.

MEQ: There's still the final status talks with the Palestinians. That's not part of the $17 billion we're talking about.

Kurz: The aid we provide Israel is to help Israel remain strong militarily. It's basically to buy weapons.

Clawson: Israel seems to be saying that if it gives up the Golan, it faces an increased risk of a Syrian surprise attack, and so it needs U.S.-provided military assistance as an offset. That means U.S. aid is the offset for Israeli withdrawal. The more Israel withdraws, the more it costs the United States.

Kurz: But American policy by every U.S. president since Truman has been to try to advance peace and stability in the Middle East. Stability in that volatile region is worth a lot. We and our allies spent $60 billion in the Gulf war. That's a lot of money, and it was spent in a few months of a major military campaign. Peace is considerably cheaper than war. If the region can be stabilized that brings benefits to the United States—not just policy benefits but also monetary benefits. Oil flows more freely, the threat of war diminishes, U.S. influence increases. The long term hope is that as the threats to Israel decline, and Israel's military is strong enough to respond to whatever threat exists, then it will no longer need as much military assistance as now. Unfortunately, looking ahead over the next few years, the military threats to Israel are increasing dramatically. The Syria aid package is a finite deal. It's not a Camp David–type deal where the mistake was made of providing Israel with large loans that she is still repaying today

MEQ: $100 billion dollars has by now been invested in Camp David.

Kurz: Yes, but much of the money to Israel was loans, not grants, and at very high interest rates.

Fradkin: When Israel first reached the plateau of $3 billion dollars in aid back in 1985, Israel's per-capita income was, let's say, half of what it is today. Are Israel's needs twice what they were fifteen years ago? Or can Israel better afford to pay its own way?

Kurz: The per-capita rationale is misleading and unfair. When we look at our expenditures in Europe for NATO, we don't look at the per-capita income of the average European—which is very high. We look at what our interests in the region are; what needs to be done to meet those interests; and how much aid you need to do that. That's the kind of calculation we make in determining our defense budget, and it's the kind of calculation we make to determine our foreign-aid budget.

Fradkin: You don't factor in Israel's economic success at all?

Kurz: I do, but just as Israel's economy is doing much better, the military threats against her are much greater. Look at what's happening in the region: the nuclear threat, the missile threat, where they are coming from, the distances involved from rogue regimes like Iran and Iraq. All of those new threats are much more difficult, much more expensive, and much harder for Israel to meet on her own.

Here's an example: In 1994, Israel had to make a major purchase of planes in order to begin replacing over one hundred aging aircraft. It had to decide whether to buy F-16s that cost $20-$30 million per plane but could not reach Iran or F-15s that have the range to reach Iran but cost $100 million a plane. It ended up buying the $100 million plane, but only twenty-one of them because of the costs involved. So, if you look at Israel's military today, it is facing real needs that are not being met even with the American aid. Their defense budget is one of the highest in the world. It's 10 percent of Israel's gross national product; that's three times what we pay for defense and it's higher than in any other Western country

Clawson: But it's less than the average that we paid during the cold war. Israel is a country of a $100 billion-a-year GNP [gross national product]. It's spending $10 billion dollars a year on defense, but at one point when Israel had half the income of its current level, it was spending 25 percent of its income on defense. So Israel's income has gone up, and the percentage of its GNP spent on defense has come down. If Israel increased its expenditure on defense from 10 percent of GNP to 13 percent of GNP, it would mean no U.S. assistance. None. That's only 3 percent of GNP to replace U.S. assistance and leave this whole issue of aid behind.

Going back to what Ester said, I don't like the analogy between Israel and NATO. If we're present in Western Europe, it's because we think we're defending the United States, and to the extent that what we're doing in Israel is defending the United States, it should be in the defense budget.

Kurz: Some have argued that it should. We should remember, however, that the money we give to Israel is both to help Israel defend herself and to defend American interests in the region. The money we give to NATO is for the support of American troops to defend Europe and American interests in Europe. As an American, I would much rather give money to another country to help defend our needs in the region than to have American troops in the region. That makes a lot more sense and is a lot cheaper.

Clawson: The United States should defend the United States. When it provides assistance to an ally, then it's appropriate for the assistance to be in the defense budget. But it's not appropriate to put money for the defense of the United States in the foreign-aid budget. Nor is it appropriate for the United States to ask others to defend its interests.

Does Aid Help or Hurt Negotiations?

MEQ: If Israel is on the verge of making peace, why does it need more money rather than less?

Kurz: Because in the short term, the potential threat will go up dramatically. In return for peace, Israel is giving up territory that has tremendous strategic value. Anybody who has been to the Golan Heights knows what it means for Israel in military terms. Coming down from the Heights means giving up valuable territory. In return for this loss of territory and in order to deter any thoughts of an attack against her, Israel will need significant new early-warning and long-range capabilities.

MEQ: You're saying that what Israel gets from the Syrians will not by itself compensate for what Israel gives to the Syrians. But what Israel gets from the United States will compensate it.

Kurz: Right. At least for the near term.

Clawson: Which means that, in negotiations between Israel and Syria, it is tempting for Israel to say, "Let's slide on a couple of these negotiating points with Damascus because we'll get compensated from Washington." To the extent we're prepared to pay for peace, we're providing Israel an incentive to make an easy agreement with the Syrians on the security side of things, confident in the knowledge that the United States will provide compensation. That provides Israel with a reason not to be demanding of Syria on security issues.

MEQ: You mean: We're making life easy for the Israelis, so they will be bad bargainers?

Clawson: Why not? We'll pay for it. So Israel doesn't have to be tough about what's not going to happen to the Mt. Hermon listening stations because they expect we will give them a satellite by way of compensation. How much is Israel going to bear of this financial burden; how much are we going to? The primary beneficiaries of a more secure environment in the region are the people in the region. Presumably, they should pay for most of it.

Kurz: They will pay for most of it. Israel is the one taking all the risks. Given that, they would much rather negotiate for the desired result than look for other compensation. However, on certain issues, the American contribution can make the difference between having an agreement and not having one. If Asad insists on something he will absolutely not budge on, and American money can help get around the deadlock, then so be it. If aid can make a big difference in producing a final agreement, then it's well worth providing. After Israel makes peace is when she becomes most vulnerable. Withdrawing from territory both in Syria and Lebanon, and possibly from more on the West Bank, exposes Israel. Presumably there will be a peace with Syria, and it will be a real peace. But if it is not and even if it is, Israel is very vulnerable—both from its immediate neighbors and from its outlying neighbors. In fact, Israel's most basic threats right now don't come from its immediate neighbors but from outside the rim. Remember, Israel is not making peace with Iran or Iraq or Libya at this point.

Clawson: But Israel's concessions to Syria do not increase its vulnerabilities to Iran or Iraq. To the extent to which Israel's vulnerabilities are to the outer rim of neighbors, a withdrawal from the Golan doesn't make much difference.

Kurz: Except psychologically.

Clawson: Fair enough. But if Israel must be compensated with an American package for what's it's giving up to Syria, this raises profound questions about the quality of the peace. And of course any aid given to Syria strengthens Syria's hand, which in turn requires Israel to strengthen its hand further still. Can't we have a de-escalation process that would reduce the amount of aid given to Syria and also to Israel? The world would be better off, and we could take those funds and devote 10 percent of them to other worthwhile purposes.

Kurz: There is no discussion right now about giving U.S. aid to Syria; that is prohibited so long as Syria remains on the terrorism list. As Israel takes real risks for peace, it is very much in the U.S. interest to help minimize those risks.

Clawson: We have entered cycle that becomes more and more expensive, instead of one that becomes less and less expensive.

MEQ: But isn't war the alternative to peace?

Clawson: No, I don't think that's the alternative. The alternative is our saying to the countries involved: "You have got to make a difficult sacrifice in order to reach peace." If the peace is something Americans have to pay for, it doesn't seem to me that the people involved have decided they really want peace.

Too Much Aid to the Middle East?

MEQ: Does the large amount of aid to Israel (and relatedly, to Egypt) reduce the resources available for aid to other countries? Or does it provide a reason for Congress to approve an aid budget that would otherwise not have the support to pass?

Mikell: I work with organizations that look at needs in Africa and other parts of the developing world. They are conscious of the fact that aid to Israel has driven much of the U.S. aid budget, and often required cuts in aid to African countries. But they also think that Israel is increasingly able to meet a larger share of its own budget for defense and development, at a time when Africa and many other countries desperately require aid to address security needs. They look at the conflicts in Africa and ask for increased money to deal with the restructuring and retraining of African militaries, with conflict resolution, with small-arms proliferation that fuels conflicts in Africa.

Many people think that the threat to Israel is now decreasing and Israel's capacity to address those threats is increasing given its sustained development. So a larger percentage of the aid budget should be spent for the Congo-Zaire crisis now, and should have been spent for peace settlements and reconstruction in Liberia and Sierra Leone. Yet we are having a difficult time getting Congress to focus on aid to Africa because so much aid goes to Israel.

Gwendolyn Mikell: We're having a difficult time getting Congress to focus on aid to Africa because so much aid goes to Israel.

Kurz: But Congress is not aware of a lot that is going on in Africa. AIPAC helped bring together a coalition of about 250 very diverse defense-related, business, and nongovernmental organizations called the Campaign for U.S. Global Leadership that is trying to educate Congress about foreign aid as a tool to enhance U.S. global interests. We've been involved in this process for a long time, and we found that one reason that members of Congress understand the importance of aid to Israel and its partners is because of a continuous, long-term educational process.

A similar effort needs to be made for the whole area of foreign aid spending. Look at the choices Congress is making in the budget being put together right now. Congress is proposing an increase of $17 billion over last year in the defense budget – nearly one and a third times the entire foreign-aid budget. We need to do a better job of educating Congress that foreign aid is an integral part of American security interests and national interests. The Campaign is trying to do this from the business angle, the military angle, and the diplomatic angle. There are lots of regions in the world where the United States has important interests and foreign aid is one of the best and cheapest ways of advancing those interests. Israel is a good example of how it has worked. Foreign aid has kept Israel strong, has encouraged moderation and stability in the Middle East, has helped in the fight against terrorism and has brought us closer to peace.

Mikell: Yes, but it's important not to define security in the cold-war sense. For example, vital U.S. economic interests are being addressed through oil imports from parts of the world other than the Middle East. With the current oil price rise, Americans should realize that approximately 20 percent of American oil imports come from Nigeria, and some also come from Angola. So we need to invest resources to secure stability and peacekeeping in those areas. That's not defense; but it is national economic security.

Clawson: Gwendolyn, is it right that our security aid to Africa is less than $60 million a year, a sum that amounts to less than 2 percent of U.S. aid to Israel?

Mikell: In the past it was around that figure. The past two years it has been more—about $10.5 million—because of the funding for the African Crisis Response Initiative, for the South African and Congo peacekeeping and conflict resolution support, and the African Center for Strategic Studies activities. Although this funding is still only symbolic, when requests for increased security assistance come up, they are often simply rejected.

Clawson: Suppose the pro-Israel community goes up to Capital Hill and asks for a massive package to subsidize Israel-Syria peace; will that make it more or less likely that additional money for Africa will be found? Would that be a moment when it would be easier to piggyback and get the money you're looking for? Or does it become more difficult, with people looking around for offsetting savings?

Mikell: It might be more difficult. Let me be clear. I am not arguing for a reduction to aid just for the sake of a reduction, but to focus attention on security and development needs in other places like Africa and the developing world.

Clawson: What about the reverse, supposing there were a reduction in aid to Israel; would this make it easier or harder to get additional resources for security assistance to Africa?

Mikell: Easier, because the American public would be able to assess new needs in a more objective way.

MEQ: Can you see a congressman voting for a marginal dollar to Syria before paying for an African rapid deployment force to deal with the Congo or Rwanda?

Mikell: In a minute.

MEQ: What do you think of that?

Mikell: It means Congress does not correctly understand U.S. security needs and national interests. It does not recognize the importance of oil and diamonds to many corporate interests in the U.S., and of African derived pharmaceuticals to many health and HIV/AIDS interests here in the United States. Congress interprets U.S. security needs as it did during the cold war when we focused on defense and energy needs in the Middle East to offset the spread of communism and revolution.

Now we have major, major problems in Congo-Zaire, with at least seven different countries involved in the conflict. I have heard it said that were this taking place in any other part of the world, we would have declared this World War III. We need to begin pouring into that region peacekeeping assistance, conflict resolution aid and development assistance. But that's not going to happen now, given our focus on peace between Israel and Syria—not that anyone would argue against the importance of that issue. They would argue, however, that the amount of aid to Israel needs to be lowered and some of it should be shared.

Kurz: It's not as simple as taking from one country and giving to another. Members of Congress look at individual programs and decide which programs they want to fund and which they don't. You could eliminate aid to Israel and still not get an extra dollar for security assistance to Africa. Last week the House Budget Committee sat down and did an exercise in budget priorities: how much for defense; how much for domestic, and how much for foreign aid. Foreign aid inevitably gets short shrift in that process because many members of Congress don't understand the importance of areas beyond the Middle East. The Middle East, however, is very much on their minds; they understand it.

There is a post-cold war imperative about the Middle East that exists with or without the Russians being heavily involved. You can see it every day in oil prices, terrorism, the proliferation of weapons of mass destruction. It's a constant.

But it's not a zero-sum game. The amounts we're talking about are minuscule compared with the overall Federal budget––less than 1 percent going to foreign aid overall. Yet there is a far too limited understanding that we need to increase that amount outside of areas that the members understand, such as the Middle East. So, we need a broader educational process.

How Much Total Foreign Aid?

MEQ: Ester argues for expanding the pie; does anybody disagree with that?

Mikell: Not me, but realistically, it won't be done.

Clawson: I do. Foreign-aid has not shown itself to be a particularly effective tool at reducing poverty or at advancing other U.S. interests. The countries that have received the most U.S. aid have not grown more rapidly than the countries which receive little or no U.S. aid. Nor are countries that receive large amounts of U.S. aid more likely to support U.S. policy objectives. Israel, for example, would be a close friend of the United States even if aid to it were much lower.

Fradkin: I agree.

MEQ: But there is a budget surplus.

Clawson: It's too easy to say we don't have to make hard choices because we have extra money available. Of course, the reason we have extra money is that we've been extraordinarily parsimonious. Every single, solitary expenditure must be examined very, very carefully to see whether it justifies itself.

MEQ: It's a zero-sum game?

Clawson: The United States is prepared to spend a certain amount of money on foreign affairs, not more. If we spend more of it in one area, we spend less in another. It's not elastic. It's not exactly a zero-sum game but it is a 10-percent-sum game.

Fradkin: That's right. There is a new situation in the post-cold war era. Aid to Africa was driven by the competition between the Soviet Union and us; now this is over. A serious discussion about foreign aid has to offer new justifications for spending money. The main options are security, economic or humanitarian.

In the case of Israel, the situation changed because the cold war ended but the existing conflict is ongoing. So there's more continuity than change. An element of that is our abiding interest in Middle East oil. The focus will remain on security questions. In Africa, absent the cold war, the main reason for aid is humanitarian. The most obvious goals would be an end to national and tribal warfare and an end to tyrannical government, but I doubt whether these are amenable to improvement through the giving of humanitarian aid.

MEQ: The foreign aid budget is too large, too small or just right?

Clawson: Too large.

Kurz: Too small.

Mikell: Definitely not too large and allocated in the wrong way. Congress for several years has said that in Africa's case, there must be less aid and more trade. I don't want aid to Africa to end but we must accept that formulation. Africa should, and is willing to, begin to pay for many of the things it previously got through aid. A large proportion of what is now aid must come from trade. The trouble is, the Congress has not stepped forward and said it will assist with that transition. It has not yet passed the African Growth and Opportunity Act that is pending before Congress to increase Africa's trade with the United States.

Clawson: We say that foreign aid is a transitional mechanism to help countries develop. Some in fact do—South Korea, for instance. Countries should graduate off the foreign-aid program. I propose we do in Africa what we did with Israel in the mid-1980s, when it was in economic difficulty. We stepped in with free trade and ideas like the qualifying industrial zones. These are the same sorts of things, by the way, we need to do help with Jordan and the Palestinian areas – and in Africa. I'm a great believer in offering all kinds of trade opportunities and advantages.

Mikell: Absolutely. Just as we're arguing for more trade assistance in Africa, there ought also to be greater focus on development and on how it assists trade in developing areas like Africa and the Palestinian Authority.

The Future of Aid to Israel

MEQ: Does anybody expect the overall foreign-aid budget to increase by more than 5 percent in the next five years?

Kurz: Hopefully, yes.

Clawson: No.

Fradkin: No.

Mikell: No, therefore we must divide it up differently.

MEQ: What's the long term plan for ending aid to Israel?

Kurz: The United States and Israel—at Israel's initiative—have already developed a plan to gradually eliminate U.S. economic aid to Israel. There is an understanding that Israel's economy is doing better, its debt repayments (the justification for economic aid in the first place) are going down. If Israel had had its debt forgiven, as Egypt did, after the Gulf war, it wouldn't need economic aid at all. But that couldn't happen because of technical budgetary reasons; so instead of forgiving the debt, the United States is essentially giving Israel the money it needs to pay back its American loans. That will end in seven years. On the military side, it's anybody's guess. If the conflict ends tomorrow, if there is a real peace treaty with Syria, if Iran becomes a moderate force in the region, if Iraq no longer is a threat to Israel, if Israel is finally accepted as a permanent, legitimate state in the Middle East, then Israel will not need to spend huge sums of money for her defense and will no longer need U.S. help in doing so.

MEQ: Is there really a difference between the economic and security aid we give to Israel?

Kurz: No, because it's all security-related. The economic aid repays prior American military loans to Israel. So it's all security aid, no matter what it's called

Clawson: I agree: The distinction between the two is not useful or meaningful. The economic aid that we give Israel is a simple cash grant. It's not as though we finance specific projects that otherwise wouldn't happen. Israel gets a certain amount of cash from the United States each year and that's how we ought to think of it.

Kurz: And the money goes right back to the United States to pay the loans that Israel took out for military purchases.

MEQ: In what year will Israel no longer be the number one recipient of U.S. aid?

Clawson: 2050.

Fradkin: 2030.

Mikell: 2010.

Kurz: The year that Israel's existence is no longer threatened and the Middle East is not as vital to U.S. interests.

Clawson: Israel's and the United States' interests would be better served by a large, final aid package upon its signing peace treaties. An all-encompassing package—and that's the end. Whatever it is, we just simply say: "This is the final package"—whether we give it in one year's budget or more, and however it's spent.

Mikell: I agree about one package. That perhaps that leaves some space, financially and intellectually, for the American public to think about partnerships with areas of the world like Africa.

Fradkin: But who knows what future threats to Israel may develop?

Clawson: I don't know, but would simply say no more aid.

Kurz: And if Iran then acquires nuclear weapons?

Clawson: Fine! If Iran has nuclear weapons, they'll turn them against the United States as well as against Israel, and the money to Israel should be in the Defense Department budget.

MEQ: Will the package to the peace-process participants—Israel, Egypt, Jordan, and the Palestinians—shift significantly from its present levels of high $2 billions for Israel and Egypt, $200 million for Jordan, $100 million for the Palestinians?

Fradkin: Aid to the Palestinians will go up.

Clawson: Egypt's will drop.

Mikell: Egypt will drop and the Palestinians will rise.

Kurz: I don't expect any significant changes in the short––term.

A U.S.-Israel Defense Agreement?

MEQ: Would a U.S.-Israel defense agreement provide an opportunity to cut direct support for Israel, because Israel would have an American security umbrella?

Kurz: No, because Israel has always said that it has to rely on herself to defend herself and not on anyone else. Further, the defense agreement being talked about is less the dramatic new treaty that U.S. ambassador to Israel Martin Indyk is pushing than an expanded version of a memorandum of understanding.

Fradkin: But we are talking about a $17-billion-dollar package to Israel! Doesn't that diminish Israel's image as self-reliant, self-sufficient with the American public? Is Israel really independent, or is it inter-dependent with the United States?

Kurz: It's possible to be inter-dependent yet still be the ultimate arbiter of one's own security. What Israel has always asked us for are the weapons to defend herself, not anything more.

Fradkin: Yes, but as the sums increase, there can occur a qualitative as well as quantitative change.

Kurz: The American public is wisely more willing to spend money than to commit American troops or risk American lives. We saw that in the Gulf war and Kosovo, where we preferred to fight expensive wars than take casualties.

Clawson: If we face an abiding security problem, we want an abiding security relationship. If the United States has a continuing interest in the Middle East, then the appropriate answer is to put this area in the Defense Department budget and address it with U.S. troops.

Kurz: Israel doesn't want U.S. troops.

Clawson: If this is a U.S. security interest for the defense of the United States, we should use them.

Kurz: Isn't it cheaper and more advantageous for the United States to provide Israel with the resources to do the job herself?

Clawson: If there are common threats that both of us face, it is appropriate to invite Israel to participate in a common security arrangement. But we as a country do not pay for mercenaries.

Kurz: No, but we do help allies who are willing to help us.

Clawson: If it's a common threat that we both face, we want our soldiers there too. A battle important enough for us to take part in must also have American lives on the line. Our blood and our treasure go hand in hand.