The urgent telephone message was still on the desk of the Senate staff member earlier this week. It commemorated a call that had come in at 1:47 p.m. the previous Wednesday informing him that President Reagan had just signed a letter opposing an increase in military and economic aid to Israel.
The novelty value of the message slip amused the staff member as he explained that, 10 minutes after he received the call, White House congressional lobbyist Powell A. Moore announced to those who were awaiting the letter's arrival outside the Senate Appropriations Committee room that "there is no letter." Thus ended for the most part a late starting, poorly coordinated and controversial effort by the Reagan administration to prevent Congress from being more generous than the White House in providing military and economic aid to Israel after June's invasion of Lebanon and at a time when the president's Middle East peace initiative remains stalled.
The congressional rejection of the president's lobbying effort, according to interviews with many of the participants in the struggle, appears to have been a product of relatively undaunted congressional support for Israel's long-term military strength as well as negative reaction to mixed signals emanating from the White House and State Department over the administration's position.
It was a struggle that pitted the president, Secretary of State George P. Shultz and national security affairs adviser William P. Clark against a congressional majority unwilling to use short-term economic leverage on Israel to help force the withdrawal of Israeli troops from Lebanon and to get on with the president's effort to establish Palestinian self-rule.
There were moments during the last six weeks when the White House position appeared in disarray, such as the afternoon of Nov. 30, when Sen. Mark O. Hatfield (R-Ore.), sitting with colleagues in a subcommittee mark-up session, read aloud the president's hold-the-line position on Israeli aid from a White House seating card with Clark's name on it.
Minutes later, Clark's message was contradicted by William Schneider, undersecretary of state in charge of foreign aid, who was called upon to clarify the administration's position.
When the numbers were all in and the House-Senate conference committee had cleared the continuing budget resolution that sets foreign aid levels for the current fiscal year, White House spokesmen discounted their loss, saying that Congress had exceeded the president's aid request for Israel by only about $100 million.
Israel's supporters, however, were privately claiming a much greater victory. Their accounting shows that the net increase in direct grant funds approved for Israel is $510 million over the president's request. The figure was buttressed by a statement released by the staff of Rep. Clarence D. Long (D-Md.), chairman of the House Appropriations subcommittee on foreign operations.
"The House recommendations and the conference agreement are $510 million in grants above the level requested by the president," the statement said.
Other budget experts argued that a more reasonable accounting puts the increase in grant aid to Israel at $250 million over the president's request.
The sequence that led to this month's confrontation began more than a year ago when Reagan signed a two-year foreign aid authorization bill that included $550 million in military grants to Israel and $850 million in guaranteed loan authority. An additional $785 million in grants was included for economic support, bringing the total package to $2.2 billion.
By February of this year, the president had submitted new legislation to address a variety of foreign aid needs, among which was the administration's commitment to Israel to add $600 million ($300 million this year) in military assistance to offset the sale of Airborne Warning and Control System (AWACS) aircraft and equipment and F15 improvements to Saudi Arabia during 1981. But in submitting his new request, which became the yardstick against which the president's loss was measured this month, Reagan did three things:
First, the $300 million in added Israeli aid was offered as a loan, not a grant. Second, $50 million of the previously authorized $550 million in military grants was put into the "loan" category and, third, the $785 million in previously authorized economic aid was resubmitted as two-thirds grant and one-third loan.
In the arithmetic of Israel's supporters, the president had reduced the actual level of grant aid to Israel by hundreds of millions of dollars and failed to meet a broadly held expectation that the $300 million added to offset the sale of AWACS planes to Saudi Arabia would come as a direct grant.
The reaction to the president's move was immediate. The American-Israeli Public Affairs Committee, one of the lobbying groups that closely monitors aid legislation, worked assiduously to convince members of Congress that the president's request unfairly thwarted Israel's ability to match the new Saudi military capability.
The Senate Foreign Relations Committee and the House Foreign Affairs Committee, which set the spending ceilings for foreign aid, rejected the president's package during April and May mark-up sessions.
In April, the House committee put $250 million of the military aid the president had designated as loans back in the grant category and converted all of the economic aid back to grants. The Senate committee reacted more strongly a month later, increasing direct grants by another $100 million. Then the committee tacked on another $125 million in economic aid grants.
"There was very little lobbying by the administration over these funding levels last spring," one Republican staff member said. State Department officials said last week that they did register their objections, arguing that the House and Senate add-ons for Israel would crowd out needed funding for other military aid recipients, especially those countries that are providing space for U.S. military bases.
The authorization bills carrying the higher funding levels were reported out by the committees, but consideration was stalled by election-year politics and the Israeli invasion of Lebanon.
One of the Office of Management and Budget officials who had followed the foreign aid bill for the administration was Schneider, who by summer's end had arrived at the State Department as undersecretary for security assistance, science and technology.
"When I moved to State, this problem was on my plate," Schneider said in an interview. "We knew this was coming down the pike since last April."
At the end of September, when Congress passed the first budget resolution that saved a government shutdown Oct. 1 at the end of the 1982 fiscal year, "I went through the exercise of what we the administration would do if we had to live with the Israeli numbers at a higher level."
Schneider said that the administration position was the same as it had been last spring: aid to Israel at a level greater than that proposed by the president would have a "very serious impact on our ability to meet other commitments around the world."
In the wake of the Israeli invasion of Lebanon June 6, events in the Middle East continued to deteriorate. The administration was shocked by the massacre of Palestinians by Christian militiamen. and the government of Prime Minister Menachem Begin quickly rejected Reagan's peace proposals.
Publicly, the president and Shultz said the time had come for movement by the Israelis on getting their forces out of Lebanon and negotiating Palestinian autonomy. But to questions of whether the administration would attempt to force Israeli concessions through some form of economic sanctions, the president and Shultz balked.
"Well, I don't think that would be good diplomacy . . . ," the president said in his Nov. 11 news conference, "and I don't believe that's necessary."
In the days before Thanksgiving, however, the administration escalated its campaign to hold down Israeli aid levels, citing for the first time what it considered Israeli intransigence in the peace process as one justification.
Long said he received a telephone call from Shultz seeking a private meeting to explain the administration's view on a number of foreign aid issues pending before the congressman's subcommittee.
"I invited him up to the office," said Long, and the two men met the day before Thanksgiving. Long said that Shultz' concern was that higher levels of aid to Israel would subtract from other needed military assistance programs around the world.
But Shultz expressed an additional concern, Long said. Shultz told Long that added Israeli aid would come "at the wrong time from the standpoint of the president trying to promote the peace process," Long said.
On the Monday after Thanksgiving, Shultz and other State Department officials invited members of Long's Appropriations subcommittee as well as members of the full committee to a turkey luncheon at the department.
Rep. Jack Kemp (R-N.Y.) said that during the luncheon Shultz again argued that the additional aid not only would crowd out other needed foreign military aid programs but would send the wrong signal to the Israelis and hurt the president's peace initiative.
"I told them I hoped they were not trying to make that case, that I thought it was a mistake from a tactical standpoint both in the Middle East and politically at home," said Kemp, adding that he cautioned Shultz that pressing Congress to reduce funding levels approved by authorizing committees months before "would look like they were trying to cut back on assistance to Israel."
Kemp said that after discussions with Long, other House members and the bipartisan leaders of key Senate committees, it was clear that "despite mistakes that were made by Israel" during its Lebanon campaign there was a majority in Congress for supporting higher funding levels.
On the morning of Nov. 30, there were two White House meetings that dealt with Israel. First, at a breakfast for the congressional leadership, Appropriations Committee Chairman Hatfield received the handwritten note on Clark's seating card for use in a Senate hearing later that day.
Then, at 10:30 a.m., Long and other members of his committee met in the Cabinet room with the president, Vice President Bush, Shultz, Clark and others, including Schneider. Ostensibly, the meeting was called for the president to push for increases in military assistance in Central America, Pakistan and other trouble spots.
According to several members who were present, however, Reagan began with a forceful argument that increasing aid to Israel would "reward Israeli intransigence" and "undercut" the peace initiative.
"I was a little surprised," said one Democratic congressman. "For the first couple of sentences, I thought he had been poorly briefed on what the meeting was about."
The president apparently had staked out a new and hard-line position toward Israel. "The possibility of coupling aid with the peace process was driven home to me for the first time," said Schneider. "The president laid on this thing very explicitly."
At 2:30 that afternoon, Schneider attended the Senate Appropriations subcommittee mark-up that would recommend what foreign aid funding levels should be included in the stopgap budget resolution.
During the debate on aid to Israel, Hatfield produced for his colleagues the White House seating card from which he read that "one of the president's top advisers" had asked the subcommittee to avoid increasing aid to Israel because it would "undercut the president's peace initiative."
Subcommittee Chairman Robert W. Kasten Jr. (R-Wis.) replied that the Senate authorization level, which exceeded the president's request by $475 million, did not, in his mind, conflict with the administration's position. Sen. Patrick J. Leahy (D-Vt.) then asked whether there was anyone in the audience who could state whether the increase would hurt the administration's peace negotiations.
Schneider stood up and told the subcommittee members that if Congress increased aid to Israel above the president's request it would be necessary to reduce the amount of aid available to other countries. Then, Schneider added, "We do not believe that it would necessarily have an adverse impact per se on the peace process."
Some of the senators and staff members present were incredulous. Before the day was out, Schneider had received an angry telephone call from Clark, who was traveling with the president in Brazil, chastising Schneider for misstating the president's position.
Schneider maintains that even though he heard the president articulate what appeared to be a new position that morning "it was hard to tell since that was a private meeting with the committee members whether this was to be the public characterization of the problem."
In addition, Schneider said that neither Shultz nor any other senior State Department official had told him that the administration was taking a new public position on aid to Israel.
The Senate subcommittee's vote to increase aid to Israel on Nov. 30 touched off a confrontation between the administration and Congress. The next day, Kenneth W. Dam, acting secretary while Shultz also accompanied the president to Latin America, wrote a letter to Hatfield warning that approval of the subcommittee action by the Appropriations Committee could "imperil" the peace process "by appearing to endorse and reward Israel's policies . . . . "
The following week, in a letter to House Appropriations Chairman Jamie L. Whitten (D-Miss.), Shultz reiterated the hard-line argument.
As the confrontation loomed, it became clearer that the administration did not have the votes to break the momentum of Israel's supporters. Middle East negotiatior Philip C. Habib telephoned Hatfield and other Senate leaders from Rome seeking last-minute support for the administration. Hatfield presided over a stormy mark-up session on Dec. 15 as the White House prepared a presidential letter to turn the tide in favor of the president. But the letter never arrived.
State Department officials who were standing by said they were told the White House had made the political calculation that the president should not inject himself personally into a losing battle. One lobbyist for the National Association of Arab Americans, David Saad, said, "By then, everybody had expected certain things from the administration and it looked like a cave-in."
Over Hatfield's objections, the Appropriations Committee approved a funding level $475 million greater than the president's request, and the full Senate followed suit the next day with a 57-to-41 vote. (Some budget analysts calculated the real increase in grant funds passed by the Senate as $735 million over the president's request.)
During the House-Senate conference on Dec. 19, Kasten, Sen. Daniel K. Inouye (D-Hawaii), Kemp, Long and others met from 10:30 a.m. to 4 p.m. trying to reach a compromise between the Senate figure and the lower House committee authorization of last April.
"I held the line," said Long. "I stuck to the House figures because we had to give some incentive for the president to sign the continuing resolution."
Long won: $200 million of the $300 million add-on to help Israel compensate for the Saudi AWACS purchase was included in the final budget resolution as direct grant funds and another $50 million in military aid that Reagan had attempted to convert to loan funds was returned to the grant category. All economic aid to Israel will be provided as grants under the resolution.